Global X MLP & Energy Infrastructure ETF (MLPX): A Tier Four ETF

One of the biggest misconceptions in investing is that all energy companies make money the same way.

They don't.

Some companies drill for oil.

Some refine it.

Some explore for new reserves.

The companies inside MLPX do something different.

They move energy.

Pipelines. Storage terminals. Processing facilities. Transportation networks.

These businesses are the toll roads of the North American energy system.

Every day, oil and natural gas need to move from where they're produced to where they're consumed.

The companies inside MLPX get paid to help make that happen.

That's exactly why I want this asset class in my retirement portfolio.

Key Statistics

Ticker: MLPX
Tier: Tier Four
Investment Style: Energy Infrastructure
Fund Inception: August 6, 2013
Expense Ratio: 0.45%
Number of Holdings: Approximately 25
Underlying Exposure: North American energy infrastructure companies and MLPs
Distribution Frequency: Quarterly

MLPX invests in companies that own and operate pipelines, storage facilities, gathering systems, processing plants, and other critical energy infrastructure throughout North America.

Why MLPX Fits Tier Four

Tier Four is designed to enhance the retirement income already built through Tiers One, Two, and Three.

The objective isn't replacing your dividend portfolio.

It's diversifying where your retirement income comes from.

Energy infrastructure is an entirely different income engine than dividend stocks, REITs, bonds, or covered call ETFs.

That's exactly why it belongs here.

What Does MLPX Own?

MLPX owns many of North America's leading energy infrastructure companies.

The portfolio includes businesses that transport, store, gather, and process oil, natural gas, and natural gas liquids.

Many investors immediately think of companies like:

Enterprise Products Partners
Energy Transfer
Kinder Morgan
Williams Companies
ONEOK
Targa Resources

These aren't businesses that primarily depend on finding more oil.

They're businesses that own the infrastructure required to move energy across the continent.

That's an important distinction.

Where This Income Comes From

The income generated by MLPX ultimately comes from the movement of energy.

Think of a pipeline like a toll road.

Every time oil or natural gas moves through that pipeline, the operator earns a fee.

Storage terminals generate fees.

Processing plants generate fees.

Gathering systems generate fees.

Those cash flows eventually become distributions and dividends paid by the companies held inside MLPX.

The ETF collects those distributions and passes them along to shareholders.

In simple terms...

Energy moves. Infrastructure companies collect fees. Investors collect income.

Why I Like MLPX

One question I occasionally receive is why there aren't any Master Limited Partnerships (MLPs) among my 50 DGI Crab stocks.

The answer is very similar to my decision with REITs.

I still like the asset class.

I simply prefer owning it through an ETF.

One reason is diversification.

Instead of relying on one pipeline operator, I own many of them.

Another reason is convenience.

Many individual MLPs issue Schedule K-1 tax forms, which can complicate tax filing, especially in taxable accounts.

MLPX provides exposure to the asset class without requiring me to own individual partnerships directly.

For me, that's a much simpler solution.

I didn't stop investing in energy infrastructure.

I simply found a better way to own it.

Who Is This ETF For?

MLPX is ideal for investors who:

Are building a Tier Four portfolio.
Want exposure to energy infrastructure.
Prefer broad diversification over selecting individual MLPs.
Want dependable income generated from essential infrastructure.
Appreciate avoiding the complexity of owning individual MLPs.

For me, MLPX has become my complete energy infrastructure solution.

Energy Infrastructure Is Different Than Oil

One reason I like MLPX is because it teaches an important investing lesson.

Owning energy infrastructure isn't the same as betting on oil prices.

Pipeline companies don't have to discover new oil fields.

They don't have to predict where crude oil prices will trade next month.

Their business is moving energy safely and efficiently.

As long as people need energy transported across North America, those infrastructure assets continue doing their job.

That's a very different business model than exploration and production.

And it's exactly the kind of steady cash-flow business I like to own.

Final Thoughts from the DGI Crab

Energy infrastructure deserves a place in a diversified retirement portfolio.

For me, MLPX is the simplest way to gain that exposure.

Diversification. Professional management. No individual K-1s. And another dependable source of retirement income built upon one of North America's most essential industries.

If I had to summarize MLPX in one sentence, it would be this:

Own the infrastructure that keeps North America's energy moving.

That's exactly why MLPX has earned its place as one of my favorite Tier Four ETFs.

DGI Crab Summary

Role in the Portfolio: Diversify retirement income through North American energy infrastructure.

Where This Income Comes From: Pipeline transportation fees, storage fees, processing fees, and other cash flows generated by energy infrastructure companies.

Should This Replace My Tier Three Holdings? No. Tier Four is designed to enhance the dependable dividend income you've already built in Tiers One through Three. The exception is investors beginning their investing journey later in life, where building around high-quality income ETFs and reinvesting distributions through DRIP can be a practical way to grow retirement income.