AMLP vs MDST

Key Takeaways

• AMLP is a passive, index-tracking fund focused almost exclusively on U.S. master limited partnerships (MLPs), while MDST is an actively managed fund that blends MLPs with midstream corporations and adds a covered-call overlay.
• AMLP holds a concentrated portfolio of roughly 13–15 names; MDST is more diversified with roughly 110–125 holdings, including C-corporations (regular corporations) alongside MLPs.
• Both funds target high current income, but MDST distributes monthly and has historically offered a higher yield (around 9–10%) versus AMLP's quarterly payout (around 7–8%).
• MDST's covered-call strategy caps some upside potential in exchange for enhanced income, whereas AMLP offers fuller participation in MLP price appreciation.
• On cost, MDST's 0.80% expense ratio is slightly below AMLP's roughly 0.85% net expense ratio, though AMLP is far larger and more liquid.
• Both funds report on Form 1099, sparing investors from the Schedule K-1 tax paperwork often associated with direct MLP ownership.

Introduction

The energy infrastructure space has become a focal point for income-seeking investors, and these two exchange-traded funds (ETFs) illustrate two distinct ways to access it. AMLP and MDST are not identical competitors; rather, they offer alternative routes to similar midstream and MLP exposure. AMLP is a long-established, index-based vehicle concentrated in large-cap MLPs, while MDST is a newer, actively managed fund that widens the net to include midstream C-corporations and layers on options-based income. Comparing their structure, sector exposure, and relative positioning helps investors decide which approach better fits their goals.

Alerian MLP ETF (AMLP) Overview

AMLP is a passively managed ETF that seeks to track the Alerian MLP Infrastructure Index, a benchmark of prominent energy infrastructure MLPs. Launched in 2010, it is one of the largest funds in its category, with assets in the range of $12–13 billion. The portfolio is intentionally concentrated, holding roughly 13–15 securities, with more than 90% of assets in the top 10 positions.

Top holdings include SUN (Sunoco LP), ET (Energy Transfer LP), WES (Western Midstream Partners LP), PAA (Plains All American Pipeline LP), MPLX, and EPD (Enterprise Products Partners LP). Sector allocation is almost entirely energy (roughly 98%), with a small utilities component. Notably, AMLP is structured as a C-corporation rather than a regulated investment company, meaning it pays corporate-level taxes and files a 1099 instead of a K-1. Its expense ratio is about 0.85%.

Westwood Salient Enhanced Midstream Income ETF (MDST) Overview

MDST is an actively managed, non-diversified ETF launched in April 2024 by Westwood. It seeks current income and capital appreciation by investing at least 80% of assets in North American midstream corporations and U.S. MLPs, while selling covered calls to enhance income. The fund holds roughly 110–125 securities, with its top 10 representing about 64% of assets.

Top holdings include ET (Energy Transfer LP), WMB (Williams Companies), Enbridge, EPD (Enterprise Products Partners LP), KMI (Kinder Morgan), DTM (DT Midstream), LNG (Cheniere Energy), and OKE (ONEOK). This blend of C-corporations and MLPs broadens exposure beyond pure MLPs. MDST distributes monthly and carries a 0.80% expense ratio.

Industry and Thematic Backdrop

Both funds operate in North American midstream energy, the segment that transports, stores, and processes oil, natural gas, and natural gas liquids. Midstream assets tend to generate fee-based, contract-driven cash flows that are less directly tied to commodity prices than upstream drilling. In recent market cycles, catalysts have included rising electricity demand from data centers and artificial intelligence, growing liquefied natural gas (LNG) export capacity, and consolidation through mergers and acquisitions (M&A). Rising interest rates can pressure yield-oriented assets, while expectations of rate cuts tend to support them. Key risks include regulatory changes, pipeline permitting constraints, and sensitivity to broader energy demand cycles.

Performance and Positioning Comparison

In recent months, both funds have benefited from favorable momentum in energy infrastructure, driven by strong free cash flow among pipeline operators and data-center-driven gas demand. AMLP's concentrated, pure-MLP exposure has historically provided higher beta to the MLP complex, while MDST's mix of C-corporations and its covered-call overlay has tended to produce steadier, income-heavy returns with more limited upside capture. Relative positioning differs meaningfully: AMLP offers deep liquidity and a lengthy track record, while MDST's younger, smaller profile (assets around $280–300 million) and options strategy introduce different volatility and liquidity characteristics. Income-focused investors may favor MDST's higher yield, whereas those seeking broader participation in price appreciation may prefer AMLP.

AI Screener

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Tickeron AI Verdict

Based on observable structural factors, Tickeron's AI would likely lean toward MDST for investors prioritizing maximum current income and broader diversification, given its higher distribution yield, lower expense ratio, and the blend of C-corporations with MLPs that reduces single-name concentration risk. However, for investors who value scale, liquidity, transparency, and a longer operating history, AMLP remains the more robust and battle-tested vehicle. The AI's preference is probabilistic and depends on the objective: income maximization and diversification favor MDST, while liquidity and full upside participation favor AMLP.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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