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The Bad News In The MLP ETN And ETF Numbers Q2-17

|Includes: JPMorgan Alerian MLP Index ETN (AMJ), AMLP, MLPG, MLPI

My coverage universe of MLP ETNs and ETFs has fallen over time and some of those once covered no longer exists - and my lack of interest in the topic has caused me to fail to seek replacements. I currently have four in my coverage. But that is enough to tell something of a story.

This is one of those idiosyncratic, but important numbers. There are sectors where "sector average" is a good thing - and sectors where it is not. For example, I have found from personal experience that beating the REIT average is a hard thing to do (I never owned a data storage or personal storage REIT - and that may be a factor). I have found that beating the Health Care average is a hard thing to do (I only own dividend paying stocks in that sector).

On the other hand, I have found that beating the industrial sector is easy - and that may be due to being over weight in packaging and transportation - and a focus on investing "with forward CAGR projection awareness". I have tended to do superior to the sector average in regional banks due to a focus on owning banks with superior dividend coverage and superior book value growth.

And I have tended to beat the MLP sector average due to (1) a focus on CAGR projection awareness that is confirmed in the DCF projections and distribution coverage ratio; (2) having sufficient investments in BDCs to the point where I did not have a need to buy yield in my MLPs and (3) constantly being under weight in E&P MLPs, G&P MLPs and propane MLPs. The focus in point one also kept me under weighted in the large cap MLPs that were going nowhere - or in the wrong direction.

In sum, there is a logical reason why I out perform the average in some sectors and fail to out perform in others. I strongly suspect that it (the logical reason) is something best seen in hindsight. But if you invest for enough years, one can turn some of one's hindsight into a bit of foresight.

So now that I have explained why I do not own MLP ETNs and EFTs - let look at the year to date numbers:

MLP ETNs & ETF 6-30-17



12-31-16 Current Q4-16 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Yield  Percent Change  LTM
ETN ___The_Full_ETF_or_ETN_Name___ Price Price Div Div Div Div Div Div Div
Price Pr + Div Div
(AMJ) JPMorgan Alerian MLP Index 31.61 29.70 0.4990 0.5355 0.5379 0.5060 0.4990 0.4610 0.4940 6.65% -6.04 -2.92 -8.16
(AMLP) ALPS Alerian MLP ETF 12.60 11.96 0.2400 0.2990 0.2400 0.2400 0.2400 0.2250 0.2150 7.19% -5.08 -1.67 -10.42
(MLPG) UBS E-TRACS Alerian Natural Gas MLP ETN 25.92 25.17 0.3690 0.4660 0.5070 0.3500 0.3690 0.3680 0.3560 5.66% -2.89 -0.15 -29.78
(MLPI) UBS E-TRACS Alerian MLP Infrastrctr ETN 28.41 26.66 0.4410 0.4956 0.4920 0.4470 0.4410 0.4310 0.4390 6.59% -6.16 -3.07 -10.77
Average









6.52% -5.04 -1.95 -14.78


Half of the coverage universe had dividend growth in Q2. All have had significant falls in the dividend over the last 12 months.

A lot of my fellow MLP investors are investing for income. If the income over time is falling, that should add a lot of color to your decision to use a 'sector average investment' in your personal portfolio.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.