Invesco Launches MLP ETF Amid Rising Demand for Natural Gas
Invesco's actively managed fund aims to capitalize on growing natural gas demand from data centers via midstream energy companies.
The master limited partnership market has changed in recent years, with infrastructure providers becoming more essential as U.S. natural gas production reaches new heights.
As data centers consume more power for artificial intelligence technologies, Invesco’s latest exchange-traded fund gives investors access to pipeline companies transporting natural gas to these facilities, positioning them to potentially benefit from this expanding infrastructure need.
Atlanta, Georgia-based Invesco (IVZ) announced today the launch of the Invesco SteelPath MLP & Energy Infrastructure ETF (PIPE), an actively managed fund providing exposure to midstream energy companies and MLPs, according to a company press release.
The fund enters the market as natural gas usage increases for data centers and export facilities, said Brian Watson, senior portfolio manager, in the release.
“Sector fundamentals are healthy and currently offer attractive distribution yield and capital appreciation potential supported by continued midstream volume growth driven by demand tailwinds from data centers and liquified natural gas exports,” Watson said.
PIPE joins 18 other MLP-focused ETFs that collectively manage $18.2 billion in assets, according to data from etf.com. These specialized funds carry an average expense ratio of 0.8%.
Natural Gas Infrastructure Expansion
The new ETF arrives as pipelines and storage facilities become increasingly important infrastructure for moving energy resources across North America. These midstream assets form the critical connection between production fields and end users.
Most MLPs pay regular distributions to investors while offering tax advantages, according to the release. The business structure passes income directly to unitholders, avoiding corporate taxation while maintaining stock-like trading features.
Current market leaders include the Alerian MLP ETF (AMLP) with $10.7 billion in assets, which has returned 10.4% over the past three months, according to etf.com data. The First Trust North American Energy Infrastructure Fund (EMLP) manages $3.2 billion, while the Global X MLP & Energy Infrastructure ETF (MLPX) holds $2.8 billion.
Unlike index-tracking competitors, PIPE will actively select investments, allowing managers to adjust holdings as market conditions change.
The 228 Invesco ETFs traded on the U.S. markets have total assets under management of $571.7 billion, according to etf.com data. The firm’s largest fund, with $333.1 billion in assets, is the tech-heavy Invesco QQQ Trust (QQQ).
