NEW YORK, Jan. 17, 2019 /PRNewswire/ -- The InfraCap MLP ETF (NYSE: AMZA) (the "Fund") has announced that it has modified its distribution policy to enable semi-annual review of monthly distribution levels, which replaces the previously-employed annual review policy.
With this policy change, AMZA is better positioned to respond to changing market dynamics impacting the master limited partnership ("MLP") industry while maintaining distribution consistency desired by income-seeking shareholders. This action is being taken in order to align distributions to shareholders more closely with the Fund's distributable cash flow. Distribution levels will be assessed by Infrastructure Capital Advisors, LLC, sub-adviser to AMZA, in January and July of each year.
The next dividend is scheduled to be declared on January 18, 2019 and paid on January 30, 2019. Dividends are planned, but not guaranteed, for each subsequent month.
Jay D. Hatfield, Chief Executive Officer of Infrastructure Capital Advisors, commented: "Midstream MLP performance was challenged in 2018 by several notable and impactful events, including continued financial restructurings, ten distribution cuts, and heightened price volatility. While our goal, as always, is to generate a consistent, high level of current income via a portfolio of quality midstream MLPs enhanced by modest leverage and option overlay strategies, this amended distribution policy will allow AMZA to respond to an evolving marketplace in a more dynamic fashion. The distribution policy change does not affect the way we manage AMZA's portfolio investments – it simply enables greater distribution flexibility, which we believe will positively impact the shareholder experience."
"Today the fundamentals of the midstream MLP business are very strong," Hatfield continued. "The powerful growth in U.S. energy production is driving volumes and transportation rates higher for MLPs. We anticipate distribution growth from the Fund's portfolio companies now that restructurings of 2018 are largely, if not entirely, complete."
Investors should note that a portion of the Fund's distributions may be categorized as return of capital. For more information about AMZA's distribution policy, its 2019 distribution calendar, or tax information, please visit the Fund's website at www.virtusetfs.com.
ABOUT INFRASTRUCTURE CAPITAL ADVISORS, LLC
Infrastructure Capital Advisors, LLC (ICA) is an SEC-registered investment advisor that manages exchange traded funds and a series of hedge funds. The firm was formed in 2012 and is based in New York City. ICA seeks total-return opportunities in key infrastructure sectors, including energy, real estate, transportation, industrials and utilities. It often identifies opportunities in entities that are not taxed at the entity level, such as master limited partnerships ("MLPs") and real estate investment trusts ("REITs"). It also looks for opportunities in credit and related securities, such as preferred stocks. Current income is a primary objective in most, but not all, of the company's investing activities. The focus is generally on asset-intensive companies that generate and distribute substantial streams of free cash flow. For more information, please visit www.infracapfunds.com.
Exchange Traded Funds: The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track. The costs of owning the ETF may exceed the cost of investing directly in the underlying securities.
MLP Interest Rates: As yield-based investments, MLPs carry interest rate risk and may underperform in rising interest rate environments. Additionally, when investors have heightened fears about the economy, the risk spread between MLPs and competing investment options can widen, which may have an adverse effect on the stock price of MLPs. Rising interest rates may increase the potential cost of MLPs financing projects or cost of operations, and may affect the demand for MLP investments, either of which may result in lower performance by or distributions from the Fund's MLP investments.
Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.
Short Sales: The fund may engage in short sales, and may experience a loss if the price of a borrowed security increases before the date on which the fund replaces the security.
Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.
Derivatives: Investments in derivatives such as futures, options, forwards, and swaps may increase volatility or cause a loss greater than the principal investment.
MLPs: Investments in Master Limited Partnerships may be adversely impacted by tax law changes, regulation, or factors affecting underlying assets.
No Guarantee: There is no guarantee that the portfolio will meet its objective.
You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. Contact ETF Distributors LLC at 1-888-383-4184 or visit www.infracapmlp.com to obtain a prospectus which contains this and other information about the fund. The prospectus should be read carefully before investing.
Virtus ETF Advisers, LLC serves as the investment advisor and Infrastructure Capital Advisors, LLC serves as the sub-advisor to the Fund.
The Fund is distributed by ETF Distributors LLC, an affiliate of Virtus ETF Advisers, LLC.
SOURCE Virtus Exchange-Traded Funds