Best Performing Active ETFs

January 19, 2017

First Trust North American Energy Infrastructure Fund (EMLP) – up 43% in the past 12 months

EMLP is among the largest MLP ETFs in the market, with $1.5 billion in assets. And it’s a direct competitor to AMZA—the year’s best-performing active ETF.

But unlike most other MLP strategies, EMLP is structured as a 1940 Act Fund, meaning it is restricted on the amount of MLP exposure it can offer. It’s not structured as C-corp. That means EMLP offers exposure that’s more complex, including pipelines and utilities structured as C-corps, among other things. It’s not a pure-play in the MLP space, but it’s clearly one that’s performing very well.

The fund’s biggest sector allocation is to pipelines at 52%, followed by electric power at 37%, according to First Trust. EMLP carries an expense ratio of 0.95% and has a 30-day yield of about 3%. 

AdvisorShares Athena High Dividend ETF (DIVI) – up 42% in the past 12 months

DIVI is a high-dividend ETF that picks its global holdings through behavioral models. Essentially, the fund looks at the holdings of active equity fund managers, then applies a behavioral model to rank stocks on measures such as conviction and consistency, and screens for the highest dividends, according to AdvisorShares.

DIVI also screens for diversification in an effort to manage risk, and is dividend-weighted. In the end, DIVI holds energy as its biggest sector weight at 20%, followed by financials at 18% and consumer discretionary at 17%. North America represents about 73% of the portfolio.

That mix is very different than, say, the portfolio of the biggest global high yield ETF in the market, the Global X Superdividend ETF (SDIV). SDIV is equal-weighted and tilts heavily toward financials—more than half the portfolio. These differences account for the 10-percentage-point difference between the two funds in the past year, as the chart below shows.

SDIV has $827 million in AUM. DIVI, however, remains small, with only $8 million in total assets. DIVI has a hefty price tag relative to other dividend strategies. It costs 0.99% in expense ratio and it trades with an average spread of 0.52%, putting its total cost above 1.5%. 

 

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