Source ETF to track US energy market

PowerlinesSource has listed a Ucits exchange-traded fund (ETF) tracking the performance of a segment of the US energy market on the London Stock Exchange.

The Source Morningstar US Energy Infrastructure MLP Ucits ETF seeks to track the Morningstar MLP Composite Index (TR).

Exposure to US energy infrastructure is created via a master limited partnership (MLP), a limited partnership that is publicly traded.

Source says MLPs have historically generated stable cash flows, with relatively low sensitivity to commodity prices, and have typically paid out a high percentage of cash flows to investors.

The underlying index targets 97% of the MLP universe by market capitalisation, and currently comprises 39 constituents.

“US energy infrastructure has become a major investment theme, but for European investors investment opportunities are limited,” says Ted Hood, the chief executive officer of Source.

Investors will have to pay a management fee of 0.50% per year.

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