First US energy infrastructure ETF hits Europe

Source ETF has launched Europe’s first US energy infrastructure ETF offering European investors exposure to an otherwise difficult to access asset class.

First US energy infrastructure ETF hits Europe

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The Source Morningstar US Energy Infrastructure MLP Ucits ETF has been launched on the London Stock Exchange, and offers diversified exposure to the US energy sector via Master Limited Partnerships (MLPs).

MLPs own and operate many of the US’s core infrastructure assets including pipelines, storage facilities, gathering systems and processing facilities and are traded on US exchanges like conventional shares.

Michael John Lytle, chief development officer at Source, said: “The US energy sector is traditionally difficult for non-domestic investors to access, particularly from a tax perspective, as they are required to file both state and federal taxes, and are subject to a 30% withholding for failure to do so.

“This product makes it much easier for European investors to access this particularly compelling investment proposition.”

The fund will track the Morningstar MLP Composite Index, which provides representative and diversified exposure to the top 97% of MLPs by market capitalisation.

It is domiciled in Ireland and is subject to a 0.5% management fee. Dividends will be paid quarterly.

A number of ETFs have hit the European market in the past few months, the most recent of which was the iShares Barclays Euro Corporate Bond Financials Ucits ETF.

 

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