MLPA or MLPX?
Last week I talked about MLPA as a unique energy sector investment. Global X Funds also has a sister fund called MLPX with more of a growth focus while still providing a dividend. Both MLPX and MLPA are managed by the same fund managers. MLPA sports a higher dividend yield. That is because MLPA is more focused on utility master limited partnership income. If you didn’t read last week’s Friday Fund blog, you might want to start there.
MLPX differs from MLPA in one attractive way: it holds USA and Canada companies. In addition, it has a higher allocation of the total invested dollars in large cap stocks, which may be less risky. But remember, it is energy and the energy sector can be volatile. MLPX has an expense ratio of 0.45% which is acceptable for this type of investment. While I like the growth aspect of this fund, I prefer to add the money to my wallet today as a part of my overall dividend growth income strategy. That is why I bought MLPA instead of MLPX. If you look at the holdings in these two ETFs you will discover some of the same companies. For example, both funds hold Enterprise Products Partners LP and Energy Transfer LP. But there are differences. Therefore, an argument could be made to further diversify by buying equal shares of both.
My recommendation from last week still holds true: Do the basics first by investing in broad index-based ETF’s that cover the S&P 500 or dividend focused ETF’s like VYM and SCHD. Then consider funds that focus on the sectors that you find attractive as long-term investments.
Link to MLPX fact sheet: https://www.globalxfunds.com/content/files/MLPX-factsheet.pdf