This passive ETF tracks an index of North American energy infrastructure companies and midstream master limited partnerships that operate oil and gas pipelines as well as storage and processing facilities. It offers exposure to stable infrastructure cash flows.

It suits income-focused investors who want to earn distribution income from energy infrastructure and can tolerate the volatility that comes with energy sector concentration.

The ETF is managed by ALPS using a passive (index-tracking) approach.

The fund tracks an index of North American energy infrastructure companies and midstream master limited partnerships that operate oil and gas pipelines as well as storage and processing facilities. By capping the weighting of master limited partnerships at a set level, it improves tax efficiency, and it is structured to give exposure to stable, fee-based infrastructure cash flows and distribution income.

• Focused exposure to North American energy infrastructure
• Pursuit of fee-based cash flows

Assets under management (AUM) stand at $515.6M, and the total expense ratio is 0.35% per year.

Compared with broad energy sector ETFs such as XLE and VDE, the main points of comparison are its midstream infrastructure concentration and its focus on distributions.

Energy infrastructure depends not only on oil and natural gas prices but also on transportation and processing volumes and on infrastructure demand, and it tends to show relatively steadier distributions than sharp swings in commodity prices would suggest. However, because of its concentration in the energy sector, it can fall along with the market during sharp oil price declines.

Fund flows into energy infrastructure diverge depending on the oil price outlook and the interest rate environment, and demand seeking distribution income can also shift money into related products. It is also worth watching how performance changes with the energy cycle and with shifts in infrastructure policy.

Its strengths are stable infrastructure cash flows and distribution income, while energy sector concentration, oil price sensitivity and interest rate effects are considerations.

For a heavier focus on midstream master limited partnerships, direct substitutes include AMLP and MLPX, and for an equity-centered approach to infrastructure, products such as EMLP are also worth comparing. The three products shown in the table, XLE, VDE and FENY, all invest in the broad energy sector, so they differ in the degree of midstream infrastructure concentration. This ETF stands apart by concentrating on North American energy infrastructure in pursuit of distribution income.

Here are the points to review before investing in ENFR. Stable infrastructure cash flows are attractive, but sector concentration, oil price sensitivity and interest rate effects should be checked in advance. It is also a good idea to compare it with broad energy and MLP products.

Changes in oil and natural gas prices, transportation volumes and the interest rate environment are the main drivers of short-term performance, and because of its concentration in a single energy sector, losses can be large during market crashes. Even though infrastructure cash flows are relatively stable, sector risk remains.

It is a suitable candidate for income-focused investors who want to pursue distribution income from North American energy infrastructure. If you want broad energy exposure, compare products such as XLE and VDE, and if you want midstream infrastructure concentration, compare this product alongside them before choosing.