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AMZA: Taking A Risk On This 20% Yielding Midstream MLP ETF

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Left Banker


  • AMZA announced its 2Q dividend after Monday's close will be unchanged at $0.52.
  • This puts AMZA's yield at 20.2%.
  • I outline my reasons for re-entering a position in AMZA.

As is its standard approach, InfraCap MLP ETF (NYSEARCA:AMZA) announced its quarterly dividend after the close on the trading day before the announced ex-date. And again, as is its standard approach, the dividend continues at $0.52/share. With the ETF’s recent declines (although it has been recovering over the past week), that puts its yield at 20.2%.

I have expressed ambivalence regarding AMZA several times since I added it to my model High-Income, Sustainable Capital Portfolio (Retirement Income: The High-Yield Sustainable-Capital CEF Portfolio 2016 Report), but it remains in that portfolio where it was the only one of 15 holdings to give up value the past quarter. But its high yield helps support the high income I've targeted for that portfolio, even as it comes at the expense of the other targeted objective, capital sustainability.

For my own investing, I have owned, sold, and repurchased AMZA. On June 28, I felt the fund’s losses were excessive, and anticipating a July 5 ex-date, I decided to re-enter the fund to capture that dividend.

For those unfamiliar with AMZA, I'll turn to the ETF's description which tells us it is an actively managed fund invested primarily in the U.S. midstream energy infrastructure sector. It strives to generate total return through capital appreciation, a high level of current income, and steady growth in the income stream. AMZA invests in equity securities of publicly-traded master limited partnerships and limited liability companies taxed as partnerships as well as related general partners. Options strategies are used in an effort to enhance current income and manage risk.

AMZA has been widely covered on Seeking Alpha, and a search of the site will turn up vast amount of information and opinions on the fund.

AMZA began as an ETF on October 1, 2014, almost precisely as the MPL market began is

This article was written by

Left Banker profile picture
I'm a retired individual investor.

Analyst’s Disclosure: I am/we are long AMZA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not an investment professional and this article does not constitute investment advice. I am passing along the results of my research on the subject. Any investor who finds these results intriguing will certainly want to do all due diligence to determine if any security mentioned here is suitable for his or her portfolio.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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