Alerian MLP ETF vs First Trust Energy Infrastructure Fund: Which Energy ETF is the Better Buy in 2026?
2026-08-08 16:31
•Brendan Coffey •The Motley Fool
••• ••••• Axe Cap view
Energy ETFs: Why EMLP Beats AMLP for South African Investors in 2026
Between two leading US energy infrastructure ETFs, First Trust's EMLP offers a safer, steadier ride compared to the high-yield but concentrated AMLP.
US energy ETFs can feel distant from the JSE, but they influence USD/ZAR via commodity flows and risk appetite for resources. AMLP’s 7.4% dividend yield looks tempting, especially with global energy prices still elevated. However, that yield comes from just 14 Master Limited Partnerships, making it vulnerable if one or two holdings stumble. EMLP spreads risk across 56 names including utilities, cushioning shocks from energy price swings. Over ten years, EMLP’s 10% annual return beats AMLP’s 7.1%, reflecting the benefit of diversification and lower volatility. For rand investors, fewer wild swings in energy assets reduce the pain when the dollar fluctuates sharply. If global demand cools faster than expected or regulatory risks hit US MLPs hard, both ETFs could underperform. But for steady US energy exposure that indirectly supports rand stability, EMLP is the smarter pick. this is just our opinion and not financial advice
Prefer buying EMLP for its broader risk spread and steadier yields. Avoid AMLP unless you want higher income and can stomach bigger swings.
- EMLP
- AMLP
- USD/ZAR
- US energy sector regulatory changes
- sudden USD/ZAR volatility impacting rand investors
6/10
The article compares two energy infrastructure ETFs: Alerian MLP ETF (AMLP) offers a higher 7.4% dividend yield with concentrated holdings in 14 MLPs, while First Trust North American Energy Infrastructure Fund (EMLP) provides broader diversification across 56 holdings including utilities with a 2.8% yield. Despite AMLP's higher returns over 3 and 5 years, EMLP is recommended as the better buy based on superior 10-year performance (10% vs 7.1% annualized returns) and lower volatility.
Our take is based on reporting first published by The Motley Fool.