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

PXJ Crosses Critical Technical Indicator
Wed, Oct 1, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares Dynamic Oil & Gas Services Portfolio ETF ...

HILO Crowded With Sellers
Wed, Oct 1, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the EGShares FTSE Emerging All Cap ex Taiwan Low ...

Brazil Mid Cap Getting Very Oversold
Wed, Oct 1, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Brazil Mid Cap ETF (BRAZ) entered into oversold ...

Shares of GML Now Oversold
Wed, Oct 1, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR S&P Emerging Latin America ETF (GML) entered ...

SPDR S&P China (GXC) Shares Cross Below 200 DMA
Wed, Oct 1, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR S&P China ETF (GXC) crossed below their ...

EUM Crosses Above Key Moving Average Level
Wed, Oct 1, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Proshares Short MSCI Emerging Markets ETF (EUM) crossed ...

BIK Crowded With Sellers
Wed, Oct 1, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR S&P BRIC 40 ETF (BIK) entered into ...

PowerShares Fundamental Pure Small Core Portfolio (PXSC) Enters Oversold Territory
Wed, Oct 1, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares Fundamental Pure Small Core Portfolio ETF (PXSC) ...

IYM Crosses Below Key Moving Average Level
Wed, Oct 1, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares U.S. Basic Materials ETF (IYM) crossed below ...

iShares MSCI Canada Breaks Below 200-Day Moving Average - Notable for EWC
Wed, Oct 1, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Canada ETF (EWC) crossed below their ...

RSCO Crosses Critical Technical Indicator
Wed, Oct 1, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR Russell Small Cap Completeness ETF (RSCO) entered ...

iShares MSCI United Kingdom Getting Very Oversold
Wed, Oct 1, 12:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI United Kingdom ETF (EWU) entered into ...

VBR Crowded With Sellers
Wed, Oct 1, 12:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Vanguard Small-Cap Value ETF (VBR) entered into oversold ...

FYX Crowded With Sellers
Wed, Oct 1, 12:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the First Trust Small Cap Core AlphaDEX Fund ETF ...

IXUS Crosses Critical Technical Indicator
Wed, Oct 1, 12:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Core MSCI Total International Stock ETF (IXUS) ...

VPL Crowded With Sellers
Wed, Oct 1, 12:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Vanguard FTSE Pacific ETF (VPL) entered into oversold ...

First Trust Europe AlphaDEX Fund Getting Very Oversold
Wed, Oct 1, 12:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the First Trust Europe AlphaDEX Fund ETF (FEP) entered ...

DFJ Makes Notable Cross Below Critical Moving Average
Wed, Oct 1, 11:54 AM ET, by ETF Channel

In trading on Wednesday, shares of the Japan SmallCap Dividend ETF (DFJ) crossed below their ...

United Rentals Achieves #84 Analyst Rank, Surpassing Adobe Systems
Wed, Oct 1, 11:54 AM ET, by ETF Channel

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

First Trust Consumer Discretionary AlphaDEX Fund Breaks Below 200-Day Moving Average - Notable for FXD
Wed, Oct 1, 11:44 AM ET, by ETF Channel

In trading on Wednesday, shares of the First Trust Consumer Discretionary AlphaDEX Fund ETF (FXD) ...

iShares MSCI All Country Asia ex Japan (AAXJ) Shares Cross Below 200 DMA
Wed, Oct 1, 11:44 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI All Country Asia ex Japan ETF ...

ACWI Makes Notable Cross Below Critical Moving Average
Wed, Oct 1, 11:44 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI ACWI ETF (ACWI) crossed below their ...

iShares U.S. Telecommunications (IYZ) Shares Cross Below 200 DMA
Wed, Oct 1, 11:34 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares U.S. Telecommunications ETF (IYZ) crossed below their ...

EWI: Large Outflows Detected at ETF
Wed, Oct 1, 11:34 AM ET, by ETF Channel

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

EFNL Crosses Critical Technical Indicator
Wed, Oct 1, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Finland Capped ETF (EFNL) entered into ...

IEIL Crowded With Sellers
Wed, Oct 1, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Enhanced International Large-Cap ETF (IEIL) entered into ...

Shares of IPAC Now Oversold
Wed, Oct 1, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Core MSCI Pacific ETF (IPAC) entered into ...

GEX Crowded With Sellers
Wed, Oct 1, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the Global Alternative Energy ETF (GEX) entered into oversold ...

EMFT Makes Notable Cross Below Critical Moving Average
Tue, Sep 30, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR MSCI EM 50 ETF (EMFT) crossed below ...

DDG Makes Bullish Cross Above Critical Moving Average
Tue, Sep 30, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the Proshares Short Oil & Gas ETF (DDG) crossed ...

RSXJ Crosses Critical Technical Indicator
Tue, Sep 30, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the Russia Small-Cap ETF (RSXJ) entered into oversold territory, ...

Shares of EMDD Now Oversold
Tue, Sep 30, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the EGShares S&P Emerging Markets Domestic Demand ETF (EMDD) ...

FDD Crowded With Sellers
Tue, Sep 30, 3:54 PM ET, by ETF Channel

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

Guggenheim Canadian Energy Income Getting Very Oversold
Tue, Sep 30, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the Guggenheim Canadian Energy Income ETF (ENY) entered into ...

See How International Business Machines Ranks Among Analysts' Top Dow 30 Picks
Tue, Sep 30, 11:54 AM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that International Business Machines Corp. ...

Equifax Moves Up In Analyst Rankings, Passing Medtronic
Tue, Sep 30, 11:54 AM ET, by ETF Channel

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

EMB: Large Outflows Detected at ETF
Tue, Sep 30, 11:34 AM ET, by ETF Channel

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

IEV: ETF Outflow Alert
Tue, Sep 30, 11:34 AM ET, by ETF Channel

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

VYM, MO, OXY, CAT: ETF Inflow Alert
Tue, Sep 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VYM, MO, OXY, CAT Exchange traded funds (ETFs) trade just ...

EWW: ETF Outflow Alert
Tue, Sep 30, 11:34 AM ET, by ETF Channel

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

BRAF Makes Notable Cross Below Critical Moving Average
Tue, Sep 30, 11:24 AM ET, by ETF Channel

In trading on Tuesday, shares of the Brazil Financials ETF (BRAF) crossed below their 200 ...

Shares of INKM Now Oversold
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR SSgA Income Allocation ETF (INKM) entered into ...

FVI Makes Bullish Cross Above Critical Moving Average
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Value Line Equity Allocation Index Fund ...

FVL Crosses Below Key Moving Average Level
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Value Line 100 Exchange-Traded Fund ETF ...

PGJ Crowded With Sellers
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares Golden Dragon China Portfolio ETF (PGJ) entered ...

Shares of CWI Now Oversold
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR MSCI ACWI ex-US ETF (CWI) entered into ...

PXH Crosses Critical Technical Indicator
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares FTSE RAFI Emerging Markets Portfolio ETF (PXH) ...

DTH Crosses Critical Technical Indicator
Tue, Sep 30, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the WisdomTree DEFA Equity Income Fund ETF (DTH) entered ...

ADP a Top 25 Dividend Giant With $397.12B Held By ETFs
Tue, Sep 30, 8:14 AM ET, by ETF Channel

Automatic Data Processing Inc. (ADP) has been named as a Top 25 ''Dividend Giant'' by ...

EEMS Crowded With Sellers
Mon, Sep 29, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the iShares MSCI Emerging Markets Small-Cap ETF (EEMS) entered ...

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 - 2014, 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.