The Alerian MLP ETF: A 15-Year Track Record and Strategic Position in the Energy Transition

The Alerian MLP ETF (AMLP) has long been a cornerstone for income-focused investors, offering exposure to energy infrastructure Master Limited Partnerships (MLPs) while navigating the evolving dynamics of the global energy transition. Over the past 15 years, AMLP has delivered a total return of +106.04%, translating to an average annualized return of +4.94%. This performance, bolstered by consistent dividend growth and a current yield of 8.11%, positions AMLP as a compelling asset in a market increasingly starved of high-yield opportunities. But beyond its historical returns lies a deeper story: how the MLP sector is adapting to decarbonization, LNG demand, and ESG priorities, ensuring AMLP remains strategically relevant in 2025 and beyond.

A 15-Year Foundation of Income and Resilience

Since its inception in August 2010, AMLP has demonstrated the dual strengths of capital preservation and income generation. A $10,000 investment in 2010 would have grown to $20,603.78 by August 2025, even after weathering the -32.27% drawdown of 2020. This resilience stems from AMLP's focus on midstream MLPs, which operate under long-term, fee-based contracts for transportation, storage, and processing of energy commodities. These contracts insulate MLPs from commodity price volatility, creating a stable cash flow foundation for dividend sustainability.

The ETF's dividend history further underscores its appeal. Over the past three years, AMLP has increased its dividend 8 times while reducing it only 2 times, reflecting a disciplined approach to distribution growth. The trailing 12-month yield of 8.0%—well above the S&P 500's 0.7%—makes AMLP a standout for income seekers. This is amplified by its C-corporation structure, which eliminates the tax complexity of K1 forms associated with direct MLP investments, making it accessible to a broader range of investors.

Strategic Relevance in the Energy Transition

The energy transition is not a zero-sum game for MLPs. While renewables are surging, natural gas and LNG remain critical components of the global energy mix. AMLP's portfolio includes operators like Kinder Morgan (KMI) and Enbridge (ENB), which are pivoting toward hydrogen infrastructure and carbon capture projects. For instance, Enbridge's investments in hydrogen pipelines align with decarbonization mandates, while Kinder Morgan's debt-to-EBITDA ratio of 4.2x and investment-grade credit rating highlight its financial discipline in a high-interest-rate environment.

The rise of U.S. LNG exports further cements AMLP's relevance. With the country becoming the world's largest LNG exporter in 2024, midstream operators are benefiting from infrastructure projects like the Port Arthur and Rio Grande LNG terminals. These developments ensure that natural gas—positioned as a bridge fuel in the transition to cleaner energy—continues to drive demand for MLP services.

ESG Alignment and Financial Health

Critics often question MLPs' ESG credentials, but the sector's evolution challenges this narrative. AMLP constituents are increasingly integrating ESG metrics into their operations. For example, Sunoco LP (SUN) has reduced methane emissions through advanced leak detection technologies, while Enterprise Products Partners (EPD) has prioritized water recycling in its operations. These efforts align with global decarbonization goals and enhance MLPs' appeal to ESG-conscious investors.

Financially, MLPs have also strengthened their balance sheets. Over 70% of Alerian MLP Infrastructure Index (AMZI) constituents now have buyback authorizations, a shift from the 2010s when unit issuance was common. This reflects improved free cash flow generation and a focus on shareholder returns. As of August 2025, AMZI trades at a forward EV/EBITDA of 8.8x, below its 10-year average of 9.7x, suggesting undervaluation relative to historical norms.

A Blended Strategy for the Energy Transition

For investors seeking to balance income with growth, a blended approach makes sense. Pairing AMLP with clean energy ETFs like the ALPS Clean Energy ETF (ACES) creates a diversified portfolio that captures both the stability of midstream MLPs and the innovation of renewables. The International Energy Agency (IEA) forecasts renewables to become the leading global power source by 2025, but natural gas will remain a critical transitional fuel, particularly in hydrogen production and grid reliability.

Conclusion: AMLP's Enduring Case

The Alerian MLP ETF's 15-year performance and strategic alignment with the energy transition make it a unique asset class. While its yield and dividend growth appeal to income investors, its adaptability to decarbonization and LNG demand ensures long-term relevance. For those wary of volatility, AMLP's low correlation with bonds and the S&P 500 offers diversification benefits. In a world where traditional fixed-income yields lag, AMLP stands out as a high-yield, tax-efficient vehicle for capital preservation and income generation.

Investment Advice: Consider AMLP as a core holding in a diversified energy transition portfolio, complemented by clean energy equities or ETFs. Monitor its exposure to interest rate movements and ESG progress, but recognize its role in bridging the gap between traditional and emerging energy paradigms.