NML: Can This LNG-Focused Fund Deliver Sustainable Returns Amid Risk?

The Neuberger Berman Energy Infrastructure Fund (NML) has significant exposure to energy infrastructure players, with its top holdings including LNG operators like Cheniere Energy and (MLPs) such as Energy Transfer LP according to fund data. This concentrated positioning targets high cash distributions, leveraging 23.08% debt to achieve an 8.01% annualized yield. However, specifically targeting MLPs-a core holding class in the fund-creates substantial downside risk as research shows. Delays in major LNG projects involving top holdings like Cheniere Energy compound this vulnerability, potentially disrupting expected cash flows.

Liquidity remains moderate at $1.595 million in daily trading volume, insufficient for large investors to enter or exit positions without impacting the market price. , amplifying price volatility during market stress. While the fund delivered 16.71% NAV returns over the past year, this performance remains mixed over the long term, particularly sensitive to energy market sentiment and interest rate shifts.

The fund's 13.24% expense ratio is notably high, directly eroding investor returns over time. This elevated cost structure becomes especially burdensome if the fund underperforms its benchmark or struggles to maintain its yield target amid regulatory headwinds. Given the concentrated exposure to MLPs facing policy uncertainty, the high expense ratio, and moderate liquidity, investors should treat this fund as a high-risk segment of the energy infrastructure space unless significant regulatory clarity emerges.

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The fund's latest monthly distribution shows how exposure to LNG infrastructure flows into cash, but investors need to understand the mechanics behind it.

A $0.0584 per‑share distribution was declared for August 2025, payable on August 29 with a record date of August 15 according to press release. This payment comes from a mix of MLP distributions, dividends, interest and other investments, with part of it treated as a non‑taxable return of capital that lowers an investor's cost basis. Federal income tax rules can also trim the net amount compared with a direct MLP investment.

Cheniere Energy, a top LNG holding in the fund, benefits from higher global demand for liquefied natural gas, especially in Asia and Europe, which generates cash flow from long-term supply contracts. That demand driver underpins the fund's cash‑flow pipeline from its LNG exposure.

However, . , with a 12‑month total NAV return of 16.71% but persistent share‑price volatility.

While LNG demand growth presents upside, the combination of elevated costs and market discounting means the distribution's sustainability is not guaranteed. Investors should weigh these factors before relying on the yield.

. This could directly reduce cash flows from the fund's key holdings, jeopardizing its distribution sustainability. Cheniere Energy, a major LNG exporter, as research shows. Should global demand forecasts prove overly optimistic, contracted shipments might not materialize, straining the predictable revenue streams these assets rely on.

Furthermore, . This discount, , according to market analysis. , . The elevated expense ratio further eats into already stressed returns, .

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The combination of project execution risks, , . , these factors highlight the volatility and specific frictions that could undermine its income strategy, particularly if market sentiment turns negative.

Valuation &

The Neuberger Berman Energy Infrastructure Fund (NML) presents a valuation dichotomy. , . This discount, , . , , . , .

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. , . . Therefore, , the path to realizing it is fraught with execution risks tied to energy prices, , and regulatory outcomes. , .