UMI vs XOP

UMIDUSCF Midstream Energy Income Fund

XOPAState Street SPDR S&P Oil & Gas Exploration & Production ETF

In short

UMI Most pipeline funds are index machines. UMI is a stock picker: sub-adviser Miller/Howard runs a concentrated book of US and Canadian midstream names, with current income as the stated first job and a payout that lands monthly.

XOP Most oil funds lean hard on a couple of supermajors. XOP goes the other way: a modified equal-weighted basket of roughly 50 drillers, refiners and producers, reset every quarter, so a small-cap operator can count about as much as a giant. Running since 2006.

Stated mandate

UMI The Fund seeks a high level of current income and, secondarily, capital appreciation. It actively invests at least 80% of net assets in equity securities of U.S. and Canadian midstream energy companies.

XOP The fund seeks, before fees and expenses, to track the total return performance of the S&P Oil & Gas Exploration & Production Select Industry Index.

Why people hold it

• UMI Actively managed, not index-tracking. Miller/Howard screens midstream companies on income, distribution coverage, leverage and contract quality, and holds roughly 30 of them.uscfinvestments.com
• Current income is the declared primary objective and capital appreciation the secondary one, and the cash goes out monthly rather than quarterly.
• Canada is written into the mandate, not treated as a footnote: at least 80% of net assets go to equity in US and Canadian midstream companies of any size.uscfinvestments.com
• Direct MLP exposure is capped at 25% of total assets, the line that keeps the fund taxed as a regulated investment company instead of as a corporation.uscfinvestments.com

• XOP Modified equal weighting, reset quarterly, means no single supermajor dominates and large, mid and small-cap names sit side by side.ssga.comspglobal.com
• A 0.35% expense ratio, below the typical charge among oil and gas E&P peers.
• Actively traded, and one of the smoother tickers to get into and out of in the energy aisle.
• Wider net than the name suggests: the index also reaches integrated oil and gas plus refining and marketing companies, not just pure explorers.ssga.com

Worth knowing

• UMI Stock picking carries a price: the 0.85% expense ratio runs well above the median for its oil and gas cohort, where XOP and IEO sit near 0.35%.
• It trades thinly next to the big energy ETFs, so spreads can be wider and sizable orders need more care at the screen.
• About 30 names inside one slice of one sector, and the fund discloses that distributions can include return of capital, which reduces your cost basis.

• XOP Equal weighting lifts smaller drillers in the mix, so swings in both directions tend to run sharper than in cap-weighted energy funds.ssga.com
• One industry, one commodity complex: this rides crude and natural gas, with about 50 holdings and no ballast from outside the patch.
• Cheaper shelfmates exist. Peer PBOG lists a 0.13% expense ratio, though it tracks a different index and a different mix of names.

Full UMI profile⁠

Full XOP profile⁠