The Credit Suisse Cushing 30 MLP Index ETN (MLPN) began trading today (4/14/10). The exchange traded notes (ETNs) are senior, unsecured debt securities issued by Credit Suisse AG designed to track the Cushing 30 MLP Index and pay a variable quarterly coupon.
The Cushing 30 MLP Index is an equal-weighted index comprised of 30 publicly traded stocks in the North American energy infrastructure niche, primarily midstream energy assets. It was created by Swank Energy Income Advisors. Each holding will have a weighting of about 3.33% after each quarterly rebalancing. Although the marketing materials show 10-year performance numbers, the index was actually introduced earlier this year (pdf).
Credit Suisse does not supply any anticipated yield information for the ETN, but Swank puts the current index yield at about 7%. After deducting the annual investor fee (expense ratio) of 0.85%, investors in MLPN should expect an annual yield a little north of 6% at current prices. Other information can be found on the MLPN overview page.
Investors can now choose from three MLP ETNs. Just two weeks ago there was only one. All three are ETNs, have a yield of about 6%, and provide access to the MLP asset class. Two concentrate on the MLP infrastructure segment. One major difference is that MLPN uses an equal-weighting process, while the others employ cap-weighting. The other major difference is the entity standing behind each of the unsecured notes.
The other products are: JP Morgan Alerian MLP ETN (AMJ) (launch article) (AMJ factsheet (pdf)) introduced in May 2009, and UBS E-TRACS Alerian MLP Infrastructure Index ETN (MLPI) (launch article) (MLPI fact sheet (pdf)), which started trading earlier this month. There was a fourth product in this area, the BearLinx Alerian MLP ETN (former ticker BSR), assumed by JPMorgan Chase after the Bear Stearns demise. It was delisted last June, about a month after JPMorgan issued nearly identical ETNs without the Bear Stearns name.
You may not have known that Credit Suisse was a player in the exchange traded product arena, but they are actually the company behind five other ETNs. In addition to MLPN, Credit Suisse issued Credit Suisse Long/Short Liquid Index ETN (CSLS) in February, and the ELEMENTS CS Global Warming ETN (GWO) two years ago. Additionally, they issued three other ETNs which were subsequently delisted and are now trading OTC: Elements MLCX Gold Index ETN (former ticker = GOE), Elements MLCX Livestock Index ETN (former ticker = LSO), and Elements MLCX Precious Metals Index ETN (former ticker = PMY).
Disclosure covering writer, editor, and publisher: Long AMJ. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.