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Junior MLP ETF (MLPJ) Hits New 52-Week High

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For investors seeking momentum, Global X Junior MLP ETF is probably on their radar now. The fund just hit a 52-week high and is up roughly 48.8% from its 52-week low price of $5.80/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

MLPJ in Focus    

The fund looks to give investors an exposure to the overall performance of the small-cap U.S. MLPs. The fund charges 75 bps in fees. Suburban Propane Partners (7.51%), NGL Energy Partners LP (7%) and CVR Refining LP (6.08%) are the top three holdings of the fund (see all MLP ETFs here).

Why the Move?

The MLP space has been an area to watch lately given the jump in oil prices and the lure of dividends. As soon as oil price staged a rally on the prospect of output cuts by OPEC and non-OPEC countries, most of the energy MLPs also started marching northward.

Plus, MLPs are known for their high-yielding nature as these do not pay taxes at the entity level and are thus able to pay out most of their income (more than 90%) in the form of dividends. MLPJ yields about 8.29% annually (as of December 29, 2016).

More Gains Ahead?

The fund should continue with its strength given a positive weighted alpha of 12.70. Since a positive weighted alpha hints at more gains, there is definitely still some promise for investors who want to ride this surging ETF a little further.

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