MLP Risk And Return Vs. Other Energy Assets

Summary

• Over the five-year window ending in May 2025, a period marked by extreme dislocations, MLPs outperformed across the board.
• We believe MLPs are positioned to continue offering a mix of attractive returns and relatively lower volatility thanks to some structural advantages built into their business models.
• MLPs are not low risk by any means. They face regulatory scrutiny, especially around environmental impact, and pipelines can become political flashpoints.

Alvaro Victor

Everyone knows that master limited partnerships (MLPs) aren’t your typical energy investments. Their pass-through tax structure, large quarterly distributions, and focus on midstream assets like pipelines set them apart from upstream oil explorers or downstream refiners.

But