AMLP's 7.7% yield and NLR's nuclear exposure define energy ETF choice

The Alerian MLP ETF (AMLP) and the VanEck Uranium and Nuclear ETF (NLR) offer investors two distinct paths into the energy sector, with AMLP providing a higher income stream and lower volatility, while NLR targets the nuclear supply chain with a lower fee structure.

AMLP focuses on master limited partnerships that manage pipelines and storage, making it a concentrated play on midstream infrastructure. The fund is heavily weighted toward the energy sector, which accounts for 98% of its portfolio, with the remaining 2% in utilities. Its largest positions include Sunoco at 12.6%, Plains All American Pipeline LP at 12.6%, and MPLX at 12.5%. Launched in 2010, AMLP has a 1.01% expense ratio. Over the trailing 12 months, the fund paid $4.07 per share, resulting in a 7.7% yield based on a recent share price of approximately $52.6. This high payout is attributable to the unique business model and tax structure of master limited partnerships, which allow for larger distributions to shareholders. Additionally, because AMLP is structured as a C-corporation, investors avoid the additional tax paperwork often required for direct MLP holdings.

In contrast, NLR tracks the MVIS Global Uranium & Nuclear Energy Index, providing exposure across the global nuclear power supply chain. The fund holds 28 securities, including uranium miners and power generation companies. Its portfolio is more diversified by sector, with energy accounting for 46.5%, utilities for 33.4%, and industrials for 20%. Top holdings include Constellation Energy at 9.8%, Public Service Enterprise Group at 8.77%, and Cameco at 8.37%. Launched in 2007, NLR has a lower expense ratio of 0.52%. Over the trailing 12 months, the fund paid $3.17 per share, working out to a 3.1% yield on a recent share price of approximately $103.4.

Volatility profiles differ between the two funds. Beta, which measures price volatility relative to the S&P 500 using monthly returns over up to five years, indicates that AMLP offers lower volatility than NLR. The 1-year return for each fund represents total return over the trailing 12 months. While AMLP is insulated from commodity price changes due to its focus on transportation and storage infrastructure, NLR's performance is tied to the nuclear energy sector.

The choice between the two often depends on investor goals. Income-focused investors may prefer AMLP for its dividend yield above 7%. Conversely, those seeking growth or broader energy market exposure might look to NLR, particularly given the potential benefits from the AI data center build-out, which drives significant energy demand and has led to partnerships between technology companies and nuclear power providers.