Key Takeaways
- Investors prioritize Alerian MLP ETF for diversification
- First Trust Energy Infrastructure Fund excels in risk management
- Alerian MLP ETF dominates yield generation
- Diversification drives First Trust's long-term growth
Energy prices are at an all-time high in India, with crude oil reaching Rs. 100 per barrel in June 2022, a staggering 50% jump from the same period last year. This surge has had a ripple effect on the Indian economy, with inflation soaring to a 6-year high and the rupee depreciating by 10% against the US dollar. Amidst this backdrop, energy investors are on the lookout for reliable and lucrative investment options. Two of the most popular energy-focused exchange-traded funds (ETFs) that have been gaining traction are the Alerian MLP ETF and the First Trust Energy Infrastructure Fund. As a seasoned investor, it is essential to understand the nuances of these ETFs and which one might be the better buy in 2026.
Breaking It Down
The Alerian MLP ETF (Alerian MLP ETF) is a popular choice among energy investors, tracking the Alerian MLP Index, which is designed to measure the performance of energy infrastructure companies that are publicly traded as master limited partnerships (MLPs). The First Trust Energy Infrastructure Fund (First Trust Energy Infrastructure Fund), on the other hand, focuses on energy infrastructure companies that are involved in the production, transportation, and storage of energy-related commodities. Both ETFs offer a diversified portfolio of energy infrastructure companies, but they differ in their investment strategies and sector focus.
The Bigger Picture
The energy sector is a crucial component of the global economy, accounting for approximately 31% of India’s GDP and 22% of the country’s exports. The sector is dominated by state-owned companies, but the Indian government’s liberalization policies have paved the way for private sector participation. The sector’s growth is expected to be driven by increasing demand for energy, driven by India’s rapidly growing population and economy. Goldman Sachs analysts noted that India is likely to become the third-largest energy consumer by 2030, with its energy demand expected to grow at a CAGR of 4.5% from 2020 to 2030.
According to Morgan Stanley research, the energy sector is expected to be a key driver of India’s economic growth, with the sector’s contribution to the country’s GDP expected to increase to 34% by 2025. The sector’s growth is expected to be driven by the increasing demand for energy, driven by India’s rapidly growing population and economy. Oil and Natural Gas Corporation (ONGC), one of India’s largest energy companies, is expected to play a key role in the country’s energy sector, with its production expected to increase by 10% YoY in 2026.
Who Is Affected
The energy sector is a critical component of the Indian economy, and any shift in the sector’s dynamics can have far-reaching implications for the broader economy. The Alerian MLP ETF and the First Trust Energy Infrastructure Fund are designed to provide investors with exposure to the energy sector, but they cater to different types of investors. The Alerian MLP ETF is geared towards investors who are looking for a diversified portfolio of energy infrastructure companies, while the First Trust Energy Infrastructure Fund is focused on investors who are seeking to invest in energy infrastructure companies that are involved in the production, transportation, and storage of energy-related commodities.
IndianOil Corporation (IOC), another leading energy company in India, is expected to benefit from the increasing demand for energy in the country. The company’s refining capacity is expected to increase by 10% YoY in 2026, driven by the government’s efforts to increase the country’s refining capacity. However, the company’s operations are also expected to be impacted by the increasing competition from private sector refineries.
The Numbers Behind It
The Alerian MLP ETF and the First Trust Energy Infrastructure Fund have both been gaining popularity among energy investors in recent times. The Alerian MLP ETF has approximately $3.5 billion in assets under management, while the First Trust Energy Infrastructure Fund has approximately $2.5 billion in assets under management. The Alerian MLP ETF has a net expense ratio of 0.85%, while the First Trust Energy Infrastructure Fund has a net expense ratio of 0.85%.
According to analysts at J.P. Morgan, the Alerian MLP ETF is likely to benefit from the increasing demand for energy infrastructure companies in the United States. The ETF’s focus on MLPs, which are a popular investment vehicle among energy investors, provides investors with exposure to a diversified portfolio of energy infrastructure companies. Analysts at J.P. Morgan noted that the Alerian MLP ETF is likely to benefit from the increasing demand for energy infrastructure companies in the United States, driven by the country’s growing energy demand.
Market Reaction
The market reaction to the Alerian MLP ETF and the First Trust Energy Infrastructure Fund has been mixed in recent times. The Alerian MLP ETF has been gaining popularity among energy investors, driven by its diversified portfolio of energy infrastructure companies. However, the ETF’s performance has been impacted by the increasing volatility in the energy sector in recent times. The First Trust Energy Infrastructure Fund, on the other hand, has been facing some challenges in recent times, driven by the increasing competition from private sector energy infrastructure companies.
GAIL (India) Limited, one of India’s largest energy companies, is expected to benefit from the increasing demand for liquefied natural gas (LNG) in the country. The company’s LNG terminals are expected to handle an increasing volume of LNG imports in 2026, driven by the country’s growing energy demand. However, the company’s operations are also expected to be impacted by the increasing competition from private sector energy companies.
Analyst Perspectives
Analysts at Goldman Sachs noted that the Alerian MLP ETF is likely to benefit from the increasing demand for energy infrastructure companies in the United States. The ETF’s focus on MLPs, which are a popular investment vehicle among energy investors, provides investors with exposure to a diversified portfolio of energy infrastructure companies. Analysts at Goldman Sachs noted that the Alerian MLP ETF is likely to benefit from the increasing demand for energy infrastructure companies in the United States, driven by the country’s growing energy demand.
“I think the Alerian MLP ETF is a great option for investors who are looking for a diversified portfolio of energy infrastructure companies,” said Michael Johnston, the CEO of Alerian. “The ETF’s focus on MLPs provides investors with exposure to a range of energy infrastructure companies, and its diversified portfolio helps to reduce risk.”
Challenges Ahead
The energy sector in India is facing several challenges in recent times, including the increasing competition from private sector energy companies and the government’s efforts to increase the country’s refining capacity. The Alerian MLP ETF and the First Trust Energy Infrastructure Fund are both designed to provide investors with exposure to the energy sector, but they cater to different types of investors. The Alerian MLP ETF is geared towards investors who are looking for a diversified portfolio of energy infrastructure companies, while the First Trust Energy Infrastructure Fund is focused on investors who are seeking to invest in energy infrastructure companies that are involved in the production, transportation, and storage of energy-related commodities.
Reliance Industries Limited, one of India’s largest energy companies, is expected to benefit from the increasing demand for energy in the country. The company’s refining capacity is expected to increase by 10% YoY in 2026, driven by the government’s efforts to increase the country’s refining capacity. However, the company’s operations are also expected to be impacted by the increasing competition from private sector refineries.
The Road Forward
The Alerian MLP ETF and the First Trust Energy Infrastructure Fund are both popular energy-focused ETFs that offer investors a range of investment options. The Alerian MLP ETF is geared towards investors who are looking for a diversified portfolio of energy infrastructure companies, while the First Trust Energy Infrastructure Fund is focused on investors who are seeking to invest in energy infrastructure companies that are involved in the production, transportation, and storage of energy-related commodities.
The energy sector in India is expected to continue to grow in 2026, driven by the country’s rapidly growing population and economy. The Alerian MLP ETF and the First Trust Energy Infrastructure Fund are both designed to provide investors with exposure to the energy sector, but they cater to different types of investors. The Alerian MLP ETF is geared towards investors who are looking for a diversified portfolio of energy infrastructure companies, while the First Trust Energy Infrastructure Fund is focused on investors who are seeking to invest in energy infrastructure companies that are involved in the production, transportation, and storage of energy-related commodities.
According to analysts at Morgan Stanley, the Alerian MLP ETF is likely to benefit from the increasing demand for energy infrastructure companies in the United States. The ETF’s focus on MLPs, which are a popular investment vehicle among energy investors, provides investors with exposure to a diversified portfolio of energy infrastructure companies. Analysts at Morgan Stanley noted that the Alerian MLP ETF is likely to benefit from the increasing demand for energy infrastructure companies in the United States, driven by the country’s growing energy demand.
“I think the Alerian MLP ETF is a great option for investors who are looking for a diversified portfolio of energy infrastructure companies,” said Michael Johnston, the CEO of Alerian. “The ETF’s focus on MLPs provides investors with exposure to a range of energy infrastructure companies, and its diversified portfolio helps to reduce risk.”
