ETFs, CEFs & More: MLP Investment Products Evolve


  • MLP/midstream investment options have evolved as the midstream space has shifted more toward corporations and the number of MLPs has declined.
  • The number of midstream RIC ETFs has increased, while the selection of closed-end funds and exchange traded notes has gradually narrowed.
  • Investors still have a wide range of active and passive MLP products to meet their investment objectives.

Over 130 MLP/midstream investment products have been launched since 2004 across closed-end funds (CEFs), ETFs, exchange traded notes (ETNs), and mutual funds. Investment products provide an important solution in the midstream/MLP space -- namely, allowing investors to get MLP exposure with a 1099, instead of a Schedule K-1. While many investment vehicles have been launched, only a portion of those products are still available today. This note looks at the MLP product landscape and some of the notable changes in recent years, which have coincided with changes in the North American midstream universe.

ETFs: Several More RICs Than C-Corp ETFs

In the MLP space, there are two types of funds -- those that predominantly own MLPs and are taxed as C-Corps, and those that are structured as regulated investment companies (RICs). Typically, an MLP-focused ETF taxed as a corporation is for investors looking to maximize after-tax yield, while an RIC is for investors seeking total return (read more).