Real estate and alternative investments (MLPs included) made up two-thirds of the equity side.
On the face of it, two sleepy companies, structured as so-called master limited partnerships (MLPs), merged.
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Instead of real estate, MLPs own energy-related assets, from gas pipelines to coal terminals.
So Murchie, a former BP executive and oil-stock analyst, decided to focus exclusively on MLPs.
Because MLPs don't pay taxes they can outbid ordinary corporations for assets without hurting per-share earnings.
Kelcy Warren, Energy Transfer Partners CEO, discusses MLPs and the state of natural gas.
But about a year ago, MLPs paid about 8.8% on average, according to the WSJ.
That should give some comfort to investors who worry they've missed the boat on MLPs.
If ultrasafe Treasury yields climb, they will seem more attractive than MLPs, hurting the partnerships' prices.
On the contrary, just like any other business, MLPs can and do lose value.
The ETN structure is also a boon for investments in master limited partnerships, or MLPs.
And the reason for that mispricing is because of lack of knowledge of commodity MLPs.
The stock skyrocketed shortly after. (Read Hedge Fund Billionaire Falcone Likes Crosstex Energy And MLPs).
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Those contracts often contain clauses that increase the fees paid to MLPs to adjust for inflation.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
It covers the entire MLP sector using a cap-weighted methodology of the 50 largest MLPs.
It tracks an equally weighted index of 15 MLPs in the natural gas infrastructure sub-segment.
Click here for recommended preferreds, MLPs, Canadian trusts and corporate bonds in Forbes-Lehmann Income Securities Investor.
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MLPs, especially those with pipelines, are also attractive because of their high tax-sheltered yields.
And none of this discussion encompasses the tax complications of investing in MLPs.
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In addition, MLPs are limited by law to specific businesses, mostly fossil energy extraction and transport.
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And as yield-sensitive investments, MLPs are a no-brainer in a world of zero interest rates.
MLPs, which, by the way, are eligible for inclusion in DIV, are another perfect example of this.
As firms like El Paso and Dynegy raced to raise capital, some spun off pipelines into MLPs.
That is because MLPs distribute not only cash income but also paper write-offs for their asset depreciation.
Murchie, a former BP executive and hedge fund manager, now runs a portfolio consisting mostly of MLPs.
Special Offer: Why bother with stocks or Treasuries when you can clean up in convertibles, preferreds and MLPs?
Most MLPs are involved in the transportation of oil and natural gas through pipelines owned by the partnership.
MLPs increase their distributions one of two ways: They either build or buy new pipelines and storage facilities.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
Meanwhile, the performance of MLP stocks has been extremely uniform, suggesting little differentiation by investors among individual MLPs.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
Over the past two decades, the investable universe of publicly traded MLPs has expanded in number and type.
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