US Energy Infrastructure MLP Index
The Index aims to track the performance of a basket of master limited partnerships (‘MLPs’) in the midstream segment of the US energy infrastructure market.
The Index is comprised of Master Limited Partnerships (“MLPs”) that are publicly traded on US stock exchanges that derive the majority of their revenues from owning and operating assets used in energy logistics, including: pipelines, storage facilities and other assets used for transporting, storing, gathering, and processing natural gas, natural gas liquids, crude oil and/or refined products.
An MLP is only eligible for inclusion in the Index if it: (1) is of a sufficient size (determined by reference to the total market value of its units); (2) is sufficiently “liquid” (a measure of how actively its units are traded on a daily basis); and (3) makes at least one “distribution” payment to investors each year (similar to a dividend paid by a company). The eligible MLPs are then ranked according to their (1) “forward looking distribution yield” (i.e. the projected value of their future distributions) and (2) “distribution stability” (i.e. how consistent their distributions are in terms of value). The top 25 ranking MLPs are then selected for inclusion in the Index and are weighted equally.