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  • Master Limited Partnership Funds Heading For Protraction 0 comments
    Oct 15, 2013 5:12 AM

    Among the fast changing trends in the investment markets, one of the latest vehicles to join the brand wagon of energy ETFs is the low-cost master limited partnership fund. This Energy related Exchange Traded Fund is structured as a C-corporation. What the consequences of the following leads to be is that the issuers can charge the investors a whooping amount of fees in addition to its stated expense ratio, which might come to as a shock for some of the investors not aware of the terms and conditions of this market. This factor only subjects its shareholders to the double-taxation on taxable income which is received from the investment fund and all the capital gains related to the fund. The Fund consists of the MLPs of the United States that engage in various energy supplying methods such as transportation, storage, processing, refining, exploration, and mining of natural resources. This financial vehicle has low volatility as it is only concerned with the amount of resources supplied and is not affected by the prices of the energy products. Moreover the supply is influenced by the growing demands of the industry and economy and the US has quite consistently shown a very stable growth path, if not a booster one. The infrastructure of the supply chain of the energy products is actually the backbone of every economy. If this infrastructure is strong and stout it will have the capacity to feed the energy requirements of the economy that are located in the various parts of the country. The investments that find their way into this sector initiate a further strength in the scale and diversification of the energy securities.

    The greatest advantages that investors have for investing into this fund are that they provide good yields and profitable dividends. This fund that belongs to the asset class is increasingly becoming a hot favorite among the investors and is lovingly finding its place in the baskets of the investors looking for the profitable and potential returns relating to the US energy sector. Moreover another feather in the cap of this fund is that it provides tax advantages that most investors look forward to.

    The top ten securities for the fund are held by MAGELLAN MIDSTREAM, KINDER MORGAN ENERGY PRTN, ENERGY TRANSFER PARTNERSP, MARKWEST ENERGY-PART UTS, WILLIAMS PARTNERS LP, ENTERPRISE PRODUCTS PRTNR, ONEOK PARTNERS LP, PLAINS ALL AMERN PIP, BUCKEYE PARTNERS and ENBRIDGE ENERGY PARTNERS.

    The Industry break down of the MLP mutual fund places Natural Gas Pipelines sector on the top most rank with a share of 42.45% of the total assets allotted. The second among them in the industry allocation is the Petroleum Transportation Sector with a share of 39.18% followed by the Refining/Distribution of 6.12% share and Coal Production share of 4.96%. Exploration & Production and Oil & Gas hold a share of approximately 7% jointly.

    The MLPA Fund as on August 2013 has recorded a $2.0 billion in managed assets with a horizon of over 100,000 investors coming from more than 100 countries; with this the fund has managed to pull the ticker in its favor.

    Global X MLP ETF [MLPA] delivers as per the performance of the Solactive MLP Composite Index. This mlp investment tracks the overall performance of the United States master limited partnership belonging to this asset class. The master limited partnership Fund charges the issuers management fees of 0.45% on an annual basis. Albeit the deferred income tax expenses increase the total expense of the fund close to 3.52%.

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