Denis Shevchuk
As a market junkie, I'm always looking for new funds to review, to see what the best and brightest minds of finance are coming up with. The FT Energy Income Partners Enhanced Income ETF (NYSEARCA:EIPI) recently caught
EIPI: Pipeline To High Yields?
Summary
- FT Energy Income Partners Enhanced Income ETF offers a 7.7% yield, which, I believe, is sustainable given its long-term average annual returns of around 9%.
- The fund's covered call strategy limits upside, causing it to underperform passive energy ETFs like AMLP and XLE over the long term.
- EIPI charges a relatively high 1.11% expense ratio, while alternative ETFs offer similar or better yields at lower costs.
- Given the capped upside and comparable yields elsewhere, I rate EIPI a hold and see little long-term appeal versus passive peers.
Author of the Macro Trends & Inflection Points Newsletter. I spent 5 years as a co-founder and hedge fund CIO / manager. Before that, I was a hedge fund analyst/portfolio manager at a leading Canadian alternative asset manager. I write articles as part of my own due diligence on the stocks that I find interesting.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.
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