The Midstream & MLPs ETF category offers investors a unique way to tap into the energy sector’s backbone. Focusing on the transportation, storage, and processing of oil, natural gas, and other commodities, these funds primarily hold Master Limited Partnerships (MLPs) and energy infrastructure companies. This segment is distinct from upstream (exploration and production) or downstream (refining and marketing) companies. For investors, these ETFs have traditionally served as a source of high-yield income and portfolio diversification, given their business models are often less sensitive to commodity price fluctuations than their upstream counterparts.
The diversity within this category is crucial to understand, as structural differences can lead to significant variations in performance and tax implications. The category can be broken down into three main sub-groups. First are the pure-play MLP funds, which are structured as C-Corporations to hold MLPs directly, offering investors a simple 1099 tax form but with the trade-off of corporate-level taxation, exemplified by the Alerian MLP ETF (AMLP). Second are the RIC-compliant Midstream & MLP funds, which cap their MLP ownership at 25% to maintain a more traditional fund structure, offering broader exposure to the midstream energy sector, such as the Global X MLP & Energy Infrastructure ETF (MLPX). Finally, there are MLP Exchange-Traded Notes (ETNs), which are unsecured debt obligations that track an index; these avoid the tax complexities of direct MLP ownership but introduce the credit risk of the issuing institution, as seen with the Alerian MLP Index ETNS Due January 28, 2044 (AMJB).
Summary (as of 7/31/2025)
- Number of Funds: 13
- Total Assets Under Management (AUM): $21.6B
- Average Expense Ratio: 0.81%
- 1-Month Net Flows: $0.00B
- 1-Year Net Flows: $2.18B
The Midstream & MLPs category is substantial, with over $21.6 billion in assets across just 13 funds. While the category has attracted a significant $2.18 billion in net flows over the past year, investor sentiment appears to have cooled recently, with flat net flows over the last month. This suggests a potential pause or consolidation phase after a period of strong investor interest.
Performance Snapshot (as of 7/31/2025)
The importance of careful fund selection is evident in the wide performance divergence seen over the last month. While the category’s average 1-month return was a modest 0.40%, the top-performing fund, the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB), gained 2.41%. In stark contrast, the bottom-performing fund, the Invesco SteelPath MLP & Energy Infrastructure ETF (PIPE), lost -1.89%. This creates a total performance spread of 4.30% between the best and worst performers, underscoring that structure and strategy can lead to vastly different outcomes for investors.
Drill Down: A Glimpse into the Full Report
The summary data only scratches the surface. Our in-depth report reveals critical insights that can help you make more informed decisions. Here are a few key takeaways:
- Structure & Market Share: Discover how concentrated this category is, with the top fund controlling nearly 50% of the total assets.
- Flows & Investor Sentiment: While the category saw flat inflows last month, some major funds experienced significant outflows. See which strategies investors are moving towards and away from.
- Risk-Adjusted Returns: The full report identifies funds like the VanEck Energy Income ETF (EINC), which has delivered a top-decile Sharpe Ratio of 1.25 over the last three years.
- Portfolio Composition: Understand what you truly own. The average fund in this category has an 88.4% allocation to the Energy sector.
- Fundamentals: Pinpoint funds that align with your investment style. Whether you’re seeking Value, Quality, or Growth, our report scores every fund, highlighting top-rated ETFs.
This is just a glimpse of the data available in our full report. By creating a free account, you can access the complete Equity: Thematic – Midstream & MLPs report and unlock all of these insights.
ETF category data is updated daily in the Home Office section of the ETF Action platform. Monthly summary PDFs (available to DIY subscribers and up) and in-depth excel data packs (available to Advisor Pro subscribers and up) are available on over 100 ETF categories.
This category snapshot was prepared with the assistance of artificial intelligence.
