Alerian MLP ETF vs First Trust Energy Infrastructure Fund: Which Energy ETF is the Better Buy in 2026?

Alerian MLP ETF (NYSEMKT:AMLP) offers a much higher dividend yield and heavy concentration in energy MLPs, while First Trust North American Energy Infrastructure Fund (NYSEMKT:EMLP) provides broader diversification across utilities and lower total volatility.

Choosing between Alerian MLP ETF and First Trust North American Energy Infrastructure Fund involves weighing high income from concentrated MLPs against broader utility diversification. While both funds target North American energy infrastructure, their portfolio structures and yield profiles differ significantly. Alerian MLP ETF focuses strictly on master limited partnerships, while the First Trust fund includes corporations and utilities. This distinction affects not just the yield but also the sensitivity to commodity prices.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the close of trading on August 6.

The Alerian MLP ETF is slightly more expensive with a 1.01% expense ratio, but it offers a much higher payout. Investors in the First Trust fund pay 0.95% annually for a more diversified but lower-yielding portfolio.

Performance & risk comparison

What's inside

Alerian MLP ETF focuses on energy infrastructure master limited partnerships (MLPs) that earn a majority of their cash flow from the transportation, storage, and processing of energy commodities. The portfolio is highly concentrated in the energy sector, which accounts for 98% of assets, with the remaining 2% in utilities. Its largest positions include Sunoco LP (NYSE:SUN) at 14.4%, Plaijs All America Pipeline LP at 13.4%, and Energy Transfer LP (NYSE:ET) at 13.2. The fund holds 14 positions and was launched in 2010. Alerian MLP ETF has paid $4.02 per share over the trailing 12 months, which on its recent ~$55.0 share price works out to a 7.4% yield.

First Trust North American Energy Infrastructure Fund targets a broader mix of companies, including U.S. and Canadian natural gas and electric utilities. The portfolio allocates 55% to utilities and 26% to energy, providing more defensive characteristics than a pure-play MLP fund. Its top holdings include Enterprise Products Partners LP (NYSE:EPD) at 8.8%, Energy Transfer at 7.7%, alongside a 7.4% cash position held in an institutional money market fund with Morgan Stanley & Co. (NYSE:MS). The fund holds 65 positions and was launched in 2012. First Trust North American Energy Infrastructure Fund has paid $1.21 per share over the trailing 12 months, which on its recent ~$43.6 share price works out to a 2.8% yield. It also incorporates an ESG screen to filter its investment universe.

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Which looks like the better buy?

Master limited partnerships — MLPs — are a common structure for midstream oil and gas businesses. The structure means that MLPs don’t pay taxes, instead handing the tax bill to investors who receive distributions. Investing directly means handling K-1 forms for each MLP, which is a time-consuming and sometimes confusing tax-time hassle.

These two ETFs simplify investing in MLPs by handling the accounting and sending shareholders a single 1099 for tax filing. It’s simpler for sure. The expense ratios for each include an allowance for the ETF’s estimated tax liability, which it will incur in the future because it will not pass along the full tax liability to ETF holders.

That’s a drag on returns — but you know that going in. And it’s reflected in historical performance for both funds. Using the Alerian ETF as an example, the future tax liability expense is currently 0.17% of the fund’s 1.01% expense ratio. That is likely to grow over time as the fund collects more distributions and tax liability.

So how to differentiate between these ETFs? The Alerian ETF, AMLP, takes a more concentrated approach to investing in midstream assets, with just 14 equities, which means 98% of its holdings are in its top 10 stocks, compared with 50% for EMLP.

But a concentrated approach does not necessarily mean a bad one. Witness AMLP’s maximum drawdown being just 6% deeper compared to EMLP. Both aren’t bad. That shows shrewd portfolio management by the index and the fund managers.

For most investors, returns are what matters most. EMLP has returned 20%, 16.6%, and 10% over the 3-, 5-, and 10-year look-backs. By comparison, AMLP returned an annualized 19% in the 3-year, 19.4% in the 5-year, and 7.1% in the 10-year.

When facing a choice between two similar ETFs in the same sector like this, I opt for long-term performance as the differentiator. Here, EMLP’s 10% annualized 10-year return leaves a real gap with AMLP’s 7.1% trailing. Go with EMLP.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.