Infrastructure Capital Advisors Launches First Actively Managed MLP ETF (AMZA)

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October 2, 2014 3:52pm NYSE:AMZA

ETFsInfrastructure Capital Advisors, a New York City based investment advisor specializing in energy, MLPs, and other key infrastructure sectors, today launched the InfraCap MLP ETF (NYSE Arca: AMZA), the first actively-managed


ETF offering pure MLP exposure. AMZA consists of high-quality, midstream energy master limited partnerships (MLPs) and related general partners and expects to establish an initial annualized distribution yield of 8.0%. The Fund seeks to achieve capital appreciation, a high level of current income and steady growth in the income stream.*

AMZA is structured to appeal to those who want to invest in the U.S. energy infrastructure industry and benefit from the ongoing oil and gas drilling renaissance.   The fund invests in midstream MLPs that are principally involved in the gathering, processing, transportation, and storage of crude oil, natural gas, natural gas liquids, and refined products. These volume based, ‘toll-road’ businesses typically generate and distribute substantial cash flow to their owners and represent a largely commodity insensitive investment in the domestic energy revolution.

The fund manager, Jay D. Hatfield, has extensive experience advising and investing in domestic energy infrastructure companies. Mr. Hatfield’s background as a co-founder and general partner of a NYSE-listed MLP, a hedge fund manager focused on the energy and utility sectors, and a Morgan Stanley utility and energy infrastructure investment banker provides him a unique perspective on the fund’s target investment universe.

The fund is designed to leverage the benefits of active management and proprietary internal research. Weightings are based on estimated total return and company fundamentals instead of market capitalization.

Tax features of the InfraCap MLP ETF include 1099 tax reporting (no K-1s), qualified dividends, and quarterly distributions. The fund may be appropriate for IRA, 401k, and foreign investors.

“We are pleased to introduce this innovative product in what we believe to be the early innings of the US energy infrastructure boom and to provide our investors with the benefit of active management and potentially superior returns” says Mr. Hatfield. “We believe that investing in companies with tangible assets that produce free cash flow creates stable, intrinsic value and is likely to produce reliable income to investors over time.”

*The fund may not be profitable, however. 

ABOUT INFRASTRUCTURE CAPITAL ADVISORS, LLC 

Infrastructure Capital Advisors, LLC is an SEC-registered investment advisor that manages an actively managed ETF and a series of private investment partnerships. The firm was formed in 2012 and is based in New York City.  The company seeks total-return opportunities in key infrastructure sectors, including energy, real estate, transportation, industrials and utilities. It often identifies opportunities in entities that are not taxed at the entity level, such as master limited partnerships (“MLPs”) and real estate investment trusts (“REITs”). It also looks for opportunities in credit and related securities, such as preferred stocks. Current income is a primary objective in most, but not all, of the company’s investing activities. The focus is generally on companies that generate and distribute substantial streams of free cash flow. For more information, please visit infracapmlp.com.

DISCLOSURE

Carefully consider the Fund’s investment objective, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which can be obtained at infracapmlp.com or by calling ETF Distributors LLC at 1-888-383-4184.  Read the prospectus carefully before investing.

An investment in the Fund is subject to investment risks; therefore you may lose money by investing in the Fund. There can be no assurance that the Fund will be successful in meeting its investment objective. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.

The Fund is subject to management risk because it is an actively managed portfolio. In managing the Fund’s investment portfolio, the sub-adviser will apply investment techniques and risk analyses that may not have the desired result. There can be no guarantee that the Fund will meet its investment objectives.

Investments in securities of MLPs involve risks that differ from investments in common stock, including risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP’s general partner and cash flow risks. MLP common units and other equity securities can be affected by macroeconomic 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). Prices of common units of individual MLPs and other equity securities also may be affected by fundamentals unique to the issuer, including earnings power and coverage ratios.

The Fund invests primarily in energy infrastructure companies. Energy infrastructure companies are subject to risks specific to the industry they serve, including, but not limited to: reduced volumes of natural gas or other energy commodities available for transporting, processing or storing; new construction risks and acquisition risk that may limit growth potential; a sustained reduced demand for crude oil, natural gas and refined petroleum products resulting from a recession or an increase in market price or higher taxes; changes in the regulatory environment; extreme weather; rising interest rates that may result in a higher cost of capital and drive investors into other investment opportunities; and threats of attack by terrorists.

A Fund concentrated in a single industry or sector, such as the energy infrastructure sector, is likely to present more risks than a fund that is broadly diversified over several industries or sectors. Compared to the broad market, an individual industry or sector may be more strongly affected by changes in the economic climate, broad market shifts, moves in a particular dominant stock or regulatory changes. Because the Fund focuses on investing in MLPs in the energy infrastructure sector, adverse events or economic changes that disproportionately affect the energy sector as a whole or parts thereof will have an adverse effect on the Fund.

The Fund is taxed as a corporation for federal income tax purposes. This differs from most investment companies, which elect to be treated as “regulated investment companies” under the Code in order to avoid paying entity level income taxes.

Etfis Capital LLC serves as the investment advisor and Infrastructure Capital Advisors, LLC serves as the sub-advisor to the fund. The Fund is distributed by ETF Distributors LLC, an affiliate of Etfis Capital LLC.


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