Alerian MLP ETF

AMLP

Market cap $11.8B

An overlooked opportunity is quietly delivering high current income and inflation-beating growth. I share an 8%+ yielding income machine with surprisingly strong growth. While other high-yield opportunities are wobbling in the current environment, this one may be built to endure.

Not every exchange-traded fund (ETF) worth owning trades at a premium. Some of the most structurally sound funds sit quietly below the radar, offering low costs, reliable income, or sector exposure that the broader market has yet to reprice fully.

Alerian MLP ETF ( NYSEARCA:AMLP ) offers income investors exposure to midstream energy infrastructure through a portfolio of Master Limited Partnerships.

System-wide BDC dividend cuts are highly likely as base dividend coverage averages 99% and growth is constrained. As a result, many BDC investors have decided to sit on the sidelines until the expected dividend cuts materialize. The idea is that a cut will lead to a negative share price reaction and thus provide a better opportunity to buy at a bargain price.

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Midstream dividend ETFs are an underrated way to derive income from the stock market, mainly because Wall Street is still overlooking them.

The Alerian MLP ETF is a fund with a high dividend yield and the potential for considerable dividend growth. The fund yields 7.7% and its portfolio stocks are growing. The ETF structure makes tax filing much easier for AMLP than for individual MLPs.

Ultra-high-yield strategies (e.g., CLO equity, aggressive call option funds) risk capital destruction and income instability. Yet, conservative blue-chip income portfolios often yield too little (3-4%) to meet robust income goals or outpace inflation. My approach is to strike a balance between these two worlds.

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The Alerian MLP ETF (NYSEARCA:AMLP) offers retirees a 7.9% yield through master limited partnerships in energy infrastructure.