Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

MLP ETFs Have Post-Election Hangover

Mon, Nov 19, 9:15 AM ET, by Michael Johnston

It’s a little more than a week out, but one of the biggest losers from the 2012 elections so far has been the entities responsible for transporting oil and gas across North America and storing petroleum products. Master Limited Partnerships have seen a string of steep sell-offs in recent days, erasing the impressive gains that had been accumulated during the first ten months of the year. These generally stable entities have seen significant downside volatility in recent days, stringing together long losing streaks that are uncommon in this corner of the energy market [see our Energy Bull ETFdb Portfolio].

Most MLP ETPs are near breakeven territory year-to-date:

Symbol Name 1 Week 4 Week YTD 1 Year 3 Year 5 Year
AMJ Alerian MLP Index ETN -6.37% -8.92% -0.09% 6.26% 65.91% n/a
AMLP Alerian MLP ETF -4.24% -5.78% -0.48% 4.35% n/a n/a
MLPI E-TRACS Alerian MLP Infrastructure Index -6.41% -8.87% -0.76% 9.13% n/a n/a
MLPN Cushing 30 MLP Index ETN -7.00% -9.88% -4.42% 2.40% n/a n/a
EMLP North American Energy Infrastructure Fund -3.97% -8.53% n/a n/a n/a n/a
YMLP Yorkville High Income MLP ETF -11.13% -13.75% n/a n/a n/a n/a
MLPG E-TRACS Alerian Natural Gas MLP Index -7.80% -12.07% -3.07% 1.40% n/a n/a
AMU ETRACS Alerian MLP Index ETN -6.46% -8.59% n/a n/a n/a n/a
MLPY Cushing MLP High Income Index ETN -7.13% -11.98% 1.16% 2.18% n/a n/a
MLPA MLP ETF -7.74% -9.48% n/a n/a n/a n/a
MLPW E-TRACS Wells Fargo MLP Index -6.77% -9.44% 2.69% 6.93% n/a n/a
Returns as of 11/16/2012

Higher Taxes, Lower Drilling

With uncertainty looming over the tax picture in 2013, part of the sell-off in MLPs could be related to the fear that tax exemptions afforded to MLPs could disappear going forward (MLPs are able to avoid “double taxation” of dividends as long as certain criteria are met). While the elimination of those tax advantages is certainly a possibility, it would do very little to solve the fiscal issues; according to the Joint Committee on Taxation, the MLP tax breaks would generate only about $300 million for the government–or about 2.5 hours of deficit buildup [see also ETF Picks For 3 Of America's Best Small Companies].

Another factor that may be weighing on MLPs this week relates to the outlook for U.S. drilling activity–which in turn drives the demand for transportation and storage services provided by MLPs. As highlighted during the debates, Obama is considerably less open to increasing drilling in the U.S. while his opponent had made the Keystone Pipeline a key part of his initiative to create domestic jobs. That boost to MLPs is likely now off the table [see 5 ETF Strategies To Reign In Risk].

High Yield Opportunity?

Of course, the recent decline in prices has had the effect of pushing up yields on MLP ETPs; effective distribution yields are now as high as 7.8% for the Cushing MLP High Income Index ETN (MLPY, A-) and 6.3% for the popular Alerian MLP ETF (AMLP, A+). Again, it’s worth noting that the operations of these entities are relatively stable; they generate fee-based revenue that doesn’t depend much on spot prices for oil and gas, and the current tax code incentivizes them to pay out substantial portions of current earnings in the form of dividends.

In other words, the recent sell-off has perhaps created some attractive entry points for an asset class that should continue to churn out cash to shareholders for the foreseeable future. If you’re considering a position in MLPs, it’s worthwhile reviewing the pros and cons of the two primary structures through which these securities can be accessed–this is one case where ETFs and ETNs are very different.

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Disclosure: No positions at time of writing.


SDI Glossary: "price" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "Risk" Definition
SDI Glossary: "Yield" Definition
This Article's Word Cloud:   AMLP   Alerian   America   Cushing   ETFdb   ETPs   Energy   High   Income   Index   Infrastructure   MLPY   MLPs   North   Partnerships   TRACS   Week   Year   about   been   could   current   date   days   dividends   drilling   during   entities   free   generate   have   little   long   more   part   prices   recent   seen   sell   stable   territory   that   these   this   very   week   which   would   year   yields

| More

Vanguard FTSE Europe Breaks Above 200-Day Moving Average - Bullish for VGK
Fri, Feb 27, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the Vanguard FTSE Europe ETF (VGK) crossed above their ...

DWM Crosses Above Key Moving Average Level
Fri, Feb 27, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the WisdomTree DEFA Fund ETF (DWM) crossed above their ...

Capital One Financial Moves Up In Analyst Rankings, Passing PerkinElmer
Fri, Feb 27, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

JNK: Large Inflows Detected at ETF
Fri, Feb 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: JNK Exchange traded funds (ETFs) trade just like stocks, but ...

IYT, FDX, UNP, KSU: Large Outflows Detected at ETF
Fri, Feb 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IYT, FDX, UNP, KSU Exchange traded funds (ETFs) trade just ...

UST: Large Outflows Detected at ETF
Fri, Feb 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: UST Exchange traded funds (ETFs) trade just like stocks, but ...

RSX, YNDX, VIP, CTCM: ETF Inflow Alert
Fri, Feb 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: RSX, YNDX, VIP, CTCM Exchange traded funds (ETFs) trade just ...

FBT, ICPT, NVAX, PCYC: ETF Inflow Alert
Fri, Feb 27, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: FBT, ICPT, NVAX, PCYC Exchange traded funds (ETFs) trade just ...

IEV: Large Outflows Detected at ETF
Fri, Feb 27, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IEV Exchange traded funds (ETFs) trade just like stocks, but ...

Lockheed Martin a Top 25 Dividend Giant With $2.49B Held By ETFs
Fri, Feb 27, 10:14 AM ET, by ETF Channel

Lockheed Martin Corp. (LMT) has been named as a Top 25 ''Dividend Giant'' by ETF ...

Eversource Energy Named A Top Socially Responsible Dividend Stock
Fri, Feb 27, 10:14 AM ET, by ETF Channel

Eversource Energy (ES) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

PowerShares DWA SmallCap Momentum Portfolio -- Insider Buying Index Registering 10.2%
Fri, Feb 27, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the PowerShares DWA SmallCap Momentum Portfolio (DWAS) ...

12.7% of DIV Holdings Seeing Recent Insider Buys
Fri, Feb 27, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SuperDividend U.S. ETF (DIV) shows an ...

IXP Crosses Above Key Moving Average Level
Thu, Feb 26, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the iShares Global Telecom ETF (IXP) crossed above their ...

Tractor Supply Achieves #96 Analyst Rank, Surpassing TE Connectivity
Thu, Feb 26, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

Vanguard Value ETF Experiences Big Inflow
Thu, Feb 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VTV Exchange traded funds (ETFs) trade just like stocks, but ...

VEA, KOSS, MFD, EZCH: ETF Inflow Alert
Thu, Feb 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VEA, KOSS, MFD, EZCH Exchange traded funds (ETFs) trade just ...

UPRO, ACT, ADBE, ADT: Large Outflows Detected at ETF
Thu, Feb 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: UPRO, ACT, ADBE, ADT Exchange traded funds (ETFs) trade just ...

TQQQ, ATVI, AKAM, ALXN: ETF Outflow Alert
Thu, Feb 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TQQQ, ATVI, AKAM, ALXN Exchange traded funds (ETFs) trade just ...

IEI: ETF Outflow Alert
Thu, Feb 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IEI Exchange traded funds (ETFs) trade just like stocks, but ...

IRV Makes Bullish Cross Above Critical Moving Average
Thu, Feb 26, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the SPDR S&P International Materials Sector ETF (IRV) crossed ...

18.5% of XBI Holdings Seeing Recent Insider Buys
Thu, Feb 26, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Biotech ETF (XBI) shows ...

Why Cincinnati Financial is a Top 25 SAFE Dividend Stock (CINF)
Thu, Feb 26, 8:14 AM ET, by ETF Channel

Cincinnati Financial Corp. (CINF) has been named to the Dividend Channel ''S.A.F.E. ...

NextEra Energy a Top 25 Dividend Giant With 2.97% Yield (NEE)
Thu, Feb 26, 8:14 AM ET, by ETF Channel

NextEra Energy Inc (NEE) has been named as a Top 25 ''Dividend Giant'' by ETF ...

EGRW Makes Bullish Cross Above Critical Moving Average
Wed, Feb 25, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Emerging Markets Growth ETF (EGRW) crossed ...

MSCI Argentina Breaks Above 200-Day Moving Average - Bullish for ARGT
Wed, Feb 25, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the MSCI Argentina ETF (ARGT) crossed above their 200 ...

GWL Crosses Above Key Moving Average Level
Wed, Feb 25, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR S&P World ex-US ETF (GWL) crossed above ...

See How AT&T Ranks Among Analysts' Top Dow 30 Picks
Wed, Feb 25, 12:14 PM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that AT&T Inc (T) is ...

Vanguard Dividend Appreciation ETF Experiences Big Outflow
Wed, Feb 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VIG, OXY, EOG, EMR Exchange traded funds (ETFs) trade just ...

XLE, XOM, CVX, SLB: ETF Inflow Alert
Wed, Feb 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: XLE, XOM, CVX, SLB Exchange traded funds (ETFs) trade just ...

Utilities Select Sector SPDR Fund Experiences Big Outflow
Wed, Feb 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: XLU, DUK, NEE, SO Exchange traded funds (ETFs) trade just ...

LQD: Large Inflows Detected at ETF
Wed, Feb 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: LQD Exchange traded funds (ETFs) trade just like stocks, but ...

MXI Makes Bullish Cross Above Critical Moving Average
Wed, Feb 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Global Materials ETF (MXI) crossed above their ...

VO: Large Inflows Detected at ETF
Wed, Feb 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VO Exchange traded funds (ETFs) trade just like stocks, but ...

iShares Short Treasury Bond ETF Experiences Big Inflow
Wed, Feb 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: SHV Exchange traded funds (ETFs) trade just like stocks, but ...

Why Analog Devices is a Top Socially Responsible Dividend Stock (ADI)
Wed, Feb 25, 8:14 AM ET, by ETF Channel

Analog Devices, Inc. (ADI) has been named a Top Socially Responsible Dividend Stock by Dividend ...

Home Depot Inc a Top 25 Dividend Giant With 2.02% Yield (HD)
Wed, Feb 25, 8:14 AM ET, by ETF Channel

Home Depot Inc (HD) has been named as a Top 25 ''Dividend Giant'' by ETF ...

ALB Named Top 25 SAFE Dividend Stock Increasing Payments For Decades
Wed, Feb 25, 8:14 AM ET, by ETF Channel

Albemarle Corp. (ALB) has been named to the Dividend Channel ''S.A.F.E. ...

PIE Crosses Above Key Moving Average Level
Tue, Feb 24, 4:34 PM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares DWA Emerging Markets Momentum Portfolio ETF (PIE) ...

FDD Makes Bullish Cross Above Critical Moving Average
Tue, Feb 24, 4:34 PM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust STOXX European Select Dividend Index Fund ...

Celgene Achieves #40 Analyst Rank, Surpassing American Tower
Tue, Feb 24, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

SCPB Crosses Above Key Moving Average Level
Tue, Feb 24, 11:34 AM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR Barclays Short Term Corporate Bond ETF (SCPB) ...

iShares Global Clean Energy (ICLN) Shares Cross Above 200 DMA
Tue, Feb 24, 11:34 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Global Clean Energy ETF (ICLN) crossed above ...

VDE, KMI.WS, APC, PSX: ETF Inflow Alert
Tue, Feb 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VDE, KMI.WS, APC, PSX Exchange traded funds (ETFs) trade just ...

Sempra Energy a Top Socially Responsible Dividend Stock With 2.5% Yield (SRE)
Tue, Feb 24, 8:14 AM ET, by ETF Channel

Sempra Energy (SRE) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

Why United Bankshares is a Top 25 SAFE Dividend Stock (UBSI)
Tue, Feb 24, 8:14 AM ET, by ETF Channel

United Bankshares, Inc. (UBSI) has been named to the Dividend Channel ''S.A.F.E. ...

Why Altria Group is a Top 25 Dividend Giant (MO)
Tue, Feb 24, 8:14 AM ET, by ETF Channel

Altria Group Inc (MO) has been named as a Top 25 ''Dividend Giant'' by ETF ...

See How Microsoft Ranks Among Analysts' Top Dow 30 Picks
Mon, Feb 23, 12:14 PM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that Microsoft Corporation (MSFT) is ...

Union Pacific Achieves #32 Analyst Rank, Surpassing Western Digital
Mon, Feb 23, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

SCC Crowded With Sellers
Mon, Feb 23, 11:34 AM ET, by ETF Channel

In trading on Monday, shares of the ProShares UltraShort Consumer Services ETF (SCC) entered into ...

Related videos | all videos »
  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

MLP ETFs Have Post-Election Hangover | Self Directed Investor | Copyright © 2008 - 2015, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of over 1000 individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.