Yorkville Launches High Income Infrastructure MLP ETF (YMLI)
Yorkville Launches High Income Infrastructure MLP ETF (YMLI)
Offers Exposure to High Distribution MLPs within Less Concentrated Index
NEW YORK--(BUSINESS WIRE)-- Yorkville ETF Advisors has expanded its lineup of master limited partnership (MLP) products with the launch of the Yorkville High Income Infrastructure MLP ETF (NYS: YMLI) .
YMLI provides exposure to infrastructure MLPs, which offer capital appreciation potential as a group of companies expected to grow significantly over the next decade in response to demand for pipelines, storage and processing systems required by rapidly growing U.S. energy production.
"Infrastructure MLPs provide investors with a potential source of high income and distribution growth in a yield-starved environment," asserts Darren Schuringa, managing partner of Yorkville ETF Advisors. "YMLI represents Yorkville's latest step toward offering a complete suite of products built on the firm's extensive MLP research and asset management experience."
YMLI's debut complements the Yorkville High Income MLP ETF (YMLP), which was seventh among all new equity ETFs in 2012 as defined by net asset inflows. The two offerings have no overlap in holdings and, together, provide composite exposure to the MLP universe.
"Our rules-based index products empower investors with new tools to customize their asset class exposure depending on their needs," adds Schuringa.
The Solactive High Income Infrastructure MLP Index, which YMLI tracks, is the only MLP index that utilizes a three-level screen to provide the basis for both quality (as defined by stable and growing distributions) and high income within a less concentrated portfolio.
Index constituents have market capitalizations greater than $1 billion and three-month average daily trading volume of four million dollars. The 25 constituents with the proper balance of income quality and quantity - as determined by the index provider, and measured by distribution size, growth and coverage ratio - are selected as equal-weighted index holdings, resulting in a less concentrated high income portfolio.
The Index, which is rebalanced annually, is published and maintained by Structured Solutions AG (www.structured-solutions.eu). Structured Solutions AG determines the components and relative weightings of the securities in the Index and publishes information regarding the Index.
Exchange Traded Concepts, LLC will serve as investment adviser to YMLI. Yorkville ETF Advisors, LLC and Index Management Solutions, LLC will serve as sub-advisers.
For more information on YMLI, please visit www.yetfs.com.
About Yorkville ETF Advisors, LLC
Yorkville ETF Advisors, LLC is an asset management firm and a subsidiary of Yorkville ETF Holdings, LLC.
The firm offers a rules-based investment philosophy with the intention of creating ETFs to track new investable indexes oriented toward income and superior investment solutions. Yorkville ETF Advisors has proven investment management and research that provides investors with innovative investment strategies.
The team at Yorkville ETF Advisors consists of leading industry professionals who have extensive experience in areas such as MLP research and investment management, index derivatives and distribution. This experience gives the firm the necessary resources to develop income-generating ETFs and provide leadership to support the initiatives of the firm and its sister companies within Yorkville ETF Holdings.
Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's prospectus, which may be obtained by visiting yetfs.com. Read the prospectus carefully before investing.
Diversification may not protect against market risk.
Investing involves risk, including the possible loss of principal. Narrowly focused investments typically exhibit higher volatility. The energy industry is highly volatile due to significant fluctuation in the prices of energy commodities, as well as political and regulatory developments. Rising interest rates could adversely impact the performance and/or the present value of cash flow of MLPs operating in the energy sector. The abilities of MLPs operating in the energy sector to grow and increase cash distributions can be highly dependent on their ability to make acquisitions that generate increasing cash flows.
Investments in common units of MLPs involve risks that differ from investments in common stock including risks inherent in the structure of MLPs, including (i) tax risks, (ii) risk related to limited control of management or the general partner or managing member, (iii) limited rights to vote on matters affecting the MLP, except with respect to extraordinary transactions, and (iv) conflicts of interest between the general partner or managing member and its affiliates and the limited partners or members, including those arising from incentive distribution payments or corporate opportunities, and cash flow risks. General partners typically have limited fiduciary duties to an MLP, which could allow a general partner to favor its interests over the MLP's interests. MLP common units can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs or the energy sector, changes in a particular issuer's financial condition, or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). Prices of common units of individual MLPs and other equity securities also can be affected by fundamentals unique to the partnership or company, including cash flow growth, cash generating power and distribution coverage. See the prospectus for more detail.
The fund invests in royalty trusts, which are dependent upon the product and sales of natural resources; as the resources deplete, production and cash flows steadily decline, which may decrease distribution rates to the fund. The Fund is non-diversified.
The fund is treated as a regular corporation for federal income tax, which differs from most investment companies. Unlike traditional ETFs, the Fund is subject to U.S. federal income tax as well as state and local income taxes. Further, the amount of taxes currently paid by the Fund will vary depending on the amount of income, and gains derived from investments and/or sales of MLP interests and such taxes will reduce your return. A portion of the Fund's distributions is expected to be treated as a return of capital for tax purposes. To the extent distributions represent a return of capital; an investor's cost basis will be reduced at the time of sale potentially increasing taxes owed.
The Fund may defer income taxes for many years on gains attributable to its underlying MLP holdings and the deferred tax liability used to calculate the Fund's NAV could vary dramatically from the Fund's actual tax liability. Upon sale of an MLP security, the Fund may be liable for previously deferred taxes and, as a result, the determination of the Fund's actual tax liability may substantially increase expenses and lower the Fund's NAV.
Unlike most ETFs, the Fund expects to effect share redemptions principally for cash, rather than in-kind, which may make the Fund less tax-efficient than an investment in a conventional ETF. Furthermore, the Fund may need to sell portfolio securities in order to raise cash for redemptions. These factors may increase transaction costs and result in the Fund having wider bid and offering spreads than conventional ETFs.
There is no guarantee that income will be paid.
Exchange Traded Concepts, LLC serves as the investment advisor and Yorkville ETF Advisors, LLC and Index Management Solutions, LLC serve as sub advisors to the fund. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.
for Yorkville ETF Advisors
Luke Napoli, 610-228-2127
KEYWORDS: United States North America New York
The article Yorkville Launches High Income Infrastructure MLP ETF (YMLI) originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.