Global X Junior MLP ETF
Dividend yield: 6.3%
The two previous funds tend to focus on the largest MLPs. But there is still plenty of value — and big dividends — to be found in smaller midstream and variable-distribution MLPs. The often-overlooked Global X Junior MLP ETF (MLPJ) allows investors to tap into those smaller firms.
MLPJ tracks the Solactive Junior MLP Index — which provides exposure to 23 different small-cap MLPs across all sectors. That provides a nice 6.3% dividend yield and offers plenty of capital gains growth as well.
Small-cap MLPs have been big targets of increasing M&A activity in the midstream sector. Larger firms are finding it easier to buy out smaller pipeline purveyors and use their gathering systems as trunk lines, rather than building an entire new system from scratch. MLPJ offers investors to buy into several potential M&A targets at once — while still collecting a some monstrously high yields.
MLPJ is structured as a C corp. So like the previously mention AMLP, the fund will incur a tax expense in addition to the fund’s 0.75% in operating expenses.