NEW YORK, May 2, 2017 /PRNewswire/ -- On April 18, 2017, Global X Funds, the New York-based provider of exchange-traded funds (ETFs), celebrated the five-year anniversary of the launch the Global X MLP ETF (NYSE: MLPA), which coincided with the fund having recently surpassed $500 million in assets. The fund was launched on April 18, 2012, and it carries a management fee (0.45%) that is more than 40% less than the industry's average management fee for MLP Exchange Traded Products (0.78%).i
MLPA aims to invest in among the largest, most liquid midstream Master Limited Partnerships. The ETF tracks the Solactive MLP Infrastructure Index and is in the $2.4 billion Income suite of Global X's funds. Over the last 12 months, the fund has more than doubled its assets under management and took in nearly $240 million in net inflows.ii
"Despite the low oil price environment, midstream MLPs have demonstrated that their business models built on the transportation and storage of oil and natural gas remain robust," said Jay Jacobs, director of research of Global X. "Increasingly, investors are exploring low cost, passive exposure to midstream MLPs as a potential source of yield."
ABOUT GLOBAL X
Seeking to provide access to high-quality and cost-efficient investment solutions, Global X is a New York-based sponsor of exchange-traded funds (ETFs). Founded in 2008, Global X is distinguished by its smart core, income, alpha, risk management and access suites of ETFs and has more than 50 funds available across U.S. and foreign exchanges. Global X is recognized as a leader in developing intelligent investment solutions.
Average management fee of Morningstar US Fund: Energy Limited Partnership category is 0.78%. Data as of 4/24/2017. Source: Morningstar. As with other MLP ETFs, the fund is subject to additional expenses.
Source: Global X. Data from March 31 2016 to March 31 2017.
Investing involves risk, including possible loss of principal. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Investments in securities of MLPs involve risk that differ from investments in common stock including risks related to limited control and limited rights to vote on matters affecting the MLP. MLP common units and other equity securities can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs or the energy sector, changes in a particular issuer's financial condition, or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). The Fund invests in the energy industry, which entails significant risk and volatility. In addition, the Fund is non-diversified. Furthermore, the Fund invests in small and mid-capitalization companies, which pose greater risks than large companies. The Fund has a different and more complex tax structure than traditional ETFs and investors should consider carefully the significant tax implications of an investment in the Fund.
The fund is taxed as a regular corporation for federal income tax purposes, which differs from most investment companies. Due to its investment in MLPs, the fund will be obligated to pay applicable federal and state corporate income taxes on its taxable income as opposed to most other investment companies. The fund expects that a portion of the distributions it receives from MLPs may be treated as tax-deferred return of capital. The amount of taxes currently paid by the fund will vary depending on the amount of income and gains derived from MLP interests and such taxes will reduce an investor's return from an investment in the fund. The fund will accrue deferred income taxes for any future tax liability associated certain MLP interests. Upon the sale of an MLP security, the fund may be liable for previously deferred taxes which may increase expenses and lower the fund's NAV. The potential tax benefits from investing in MLPs depend on them being treated as partnerships for federal income tax purposes. If the MLP is deemed to be a corporation then its income would be subject to federal taxation at the entity level, reducing the amount of cash available for distribution to the fund which could result in a reduction of the fund's value.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Carefully consider the Fund's investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund's summary or full prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting www.globalxfunds.com.
Global X Funds are not sponsored, endorsed, issued, sold or promoted by Solactive AG nor does Solactive AG make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO nor Global X is affiliated with Solactive AG.
Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company, LLC.