November has been a consistently challenging month over the years for MLPs. In fact, it has historically been the worst month for the MLP Index, as shown in the chart below (which includes 2011 month to date of -3.45% so far). The MLP Index has averaged a 1.7% decline in the month of November, dragged down by the worst month ever back in November 2008 when the index dropped 18.0%.
MLP prices trade in quarterly patterns generally, trading lower after distributions get paid each quarter, so its not surprising that November, February, May and August are the 4 worst months for MLPs.
So far this week, MLPs are down 2.3%, which is great considering the global meltdown in risk assets underway. According to a post by Bespoke Investment Group, the 4.4% decline for the S&P 500 was the largest decline to start the holiday week in recorded history. What about MLPs, was the 2.3% decline so far this week the worst ever? It turns out it was as shown in the chart below of the pre-Thanksgiving week performances since 1996.
Interestingly for MLP history nerds (how many of those can there be? not many), the Friday before Thanksgiving was the financial crisis low for the index at 152.68. The following Wednesday, the index had jumped an astonishing 24.25 points, all the way to 176.93. So, if you bought the index (un-investable at the time) on 11/21/2008, congrats on your 15.9% gain that week, and your 135.9% price gain since then (almost 200% including distributions). For the rest of us, let's give thanks that MLPs have outperformed so far in an relentlessly ugly November so far.
Disclosure: Long sweet potatoes, pecan pie and football, short Thanksgiving Day Parade, apple pie and green bean caserole...