EMLP vs UMI

Key Takeaways

• EMLP offers diversified North American energy infrastructure exposure, blending midstream energy with a substantial allocation to regulated utilities; UMI is a concentrated, pure-play midstream income fund.
• UMI holds roughly 24–25 names, while EMLP holds roughly 60–65, giving EMLP a meaningfully broader diversification profile.
• Both funds are actively managed and income-oriented, but EMLP carries a higher expense ratio (0.95%) than UMI (0.85% gross, with a lower net ratio after fee waivers).
• Sector exposure diverges sharply: UMI is effectively 100% energy, while EMLP splits nearly evenly between energy and utilities.
• The two ETFs overlap in large-cap midstream names but differ in risk profile, interest-rate sensitivity, and volatility characteristics.

Introduction

Investors seeking income and inflation-hedging characteristics frequently turn to North American energy infrastructure, a segment defined by pipelines, processing, storage, and regulated utility networks. EMLP and UMI both operate in this space, but they represent different strategic answers to the same question. EMLP is a diversified energy infrastructure fund that pairs midstream companies with electric and gas utilities, while UMI is a concentrated, income-focused midstream portfolio. Comparing them helps investors understand how sector exposure, concentration, and cost structure shape relative positioning and risk.

First Trust North American Energy Infrastructure Fund (EMLP) Overview

The First Trust North American Energy Infrastructure Fund (EMLP) is an actively managed ETF that invests primarily in equity securities of companies engaged in North American energy infrastructure. Its mandate spans master limited partnerships (MLPs, tax-advantaged partnerships common in energy transportation), MLP affiliates, pipeline operators, and regulated utilities across the United States and Canada. The fund typically holds roughly 60 to 65 positions.

Top holdings include large-cap midstream operators such as Enterprise Products Partners (EPD), Energy Transfer (ET), Plains GP Holdings (PAGP), MPLX (MPLX), Kinder Morgan (KMI), and ONEOK (OKE), alongside utilities such as National Fuel Gas (NFG), The Southern Company (SO), and PPL Corporation (PPL). Sector allocation is roughly balanced between energy and utilities, a structural feature that tempers commodity-price sensitivity. The fund carries an expense ratio of 0.95%.

USCF Midstream Energy Income Fund (UMI) Overview

The USCF Midstream Energy Income Fund (UMI) is an actively managed, income-focused ETF concentrated in midstream energy infrastructure companies. The strategy uses a fundamental approach that integrates ESG (environmental, social, and governance) research, targeting businesses that operate pipelines, gathering and processing systems, storage terminals, and related assets. The portfolio is considerably more concentrated than EMLP, typically holding only about 24 to 25 names.

Top positions include Energy Transfer (ET), Enterprise Products Partners (EPD), Targa Resources (TRGP), Williams (WMB), Kinder Morgan (KMI), DT Midstream (DTM), MPLX (MPLX), ONEOK (OKE), and Plains GP Holdings (PAGP). The fund is effectively a pure energy exposure, with energy representing nearly 100% of assets. Its gross expense ratio is 0.85%, with a lower net expense ratio after fee waivers in recent periods.

Industry and Thematic Backdrop

Both funds operate within the North American energy infrastructure theme, which has been shaped by several durable catalysts. Sustained demand for natural gas, expanding LNG (liquefied natural gas) export capacity, and growing electricity needs from data centers have supported midstream cash flows and utility investment. Midstream companies generally generate fee-based revenue tied to volumes rather than commodity prices, which has helped stabilize earnings across recent market cycles. Interest-rate expectations also matter, because higher-for-longer rate environments can raise financing costs and pressure yield-oriented equities. Regulatory developments around pipeline permitting and utility rate cases remain key watch items, as do capital expenditure cycles among the largest operators.

Performance and Positioning Comparison

In recent weeks and months, both funds have been influenced by broad rotation into income-generating and energy-adjacent equities, but their structural differences have produced distinct behavior. UMI, with its concentrated pure-midstream exposure, has tended to move more directly with energy-sector momentum and earnings results from large operators such as Enterprise Products Partners and Williams. EMLP, by contrast, blends that energy exposure with defensive utility holdings, which has historically moderated volatility and reduced sensitivity to swings in oil and gas sentiment. In a rising-rate environment, EMLP's utility sleeve can act as a relative headwind, while UMI's fee-based midstream cash flows may hold up more consistently. Relative positioning therefore hinges on whether investors favor pure energy income or a diversified energy-plus-utilities profile.

AI Screener

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Tickeron AI Verdict

Based on observable structural factors, Tickeron's AI would likely lean toward EMLP for investors prioritizing diversification and lower single-name concentration, while favoring UMI for those seeking direct, high-conviction midstream income exposure. On a blended basis, the AI framework tends to reward EMLP's broader holding count, its balance between energy and defensive utilities, and its more tempered volatility profile. UMI's tighter portfolio and near-total energy allocation offer potentially stronger sector momentum capture but also greater concentration risk. The choice ultimately reflects whether an investor prioritizes diversification and stability or concentrated thematic exposure and income potential.

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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