Unlike shareholders in corporations, MLP investors are stuck with a tax bill for the distributions.
Jerry Swank, founder of Swank Capital, an MLP investment firm, favors players in the natural-gas-liquids business.
There are pros and cons for investors looking for MLP exposure via mutual funds.
Kayne Anderson MLP Investment Co shares are currently trading off about 1.3% on the day.
Kayne Anderson MLP Investment Co shares are currently trading up about 0.7% on the day.
Additionally, the MLP indexes have been less volatile than the stock market in recent months.
The underlying Alerian Natural Gas MLP Index has a current yield of 6.56%.
Common responses are to look at dividend-paying stocks and to consider REITs or MLP exposure.
Enron, at the same time, was looking to dump its Enron Liquid Pipelines MLP.
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Kayne Anderson MLP Investment Co shares are currently trading off about 0.9% on the day.
"Everybody's buying the same top 10, " says Jason Stevens, who follows MLP stocks for Morningstar.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
"We see the typical MLP increasing its distributions by 5% a year, " said Morningstar's Mr. Stevens.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
Supporting that optimism is that MLP clients sign long-term contracts, often for 10 or 15 years.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
It covers the entire MLP sector using a cap-weighted methodology of the 50 largest MLPs.
Most MLP indexes are yielding north of 6% while 5-year Treasury securities yield less than 2%.
Also, you could get pushed into the alternate minimum tax, depending on how the MLP treats depreciation.
So there is this obvious economic incentive to sell those assets from corporate holders to MLP holders.
So those managers know that they are better off selling those energy infrastructure assets to an MLP.
For example, The MDE Group invests in the SteelPath MLP Alpha Fund and the Lazard Emerging Income Fund.
Meanwhile, the performance of MLP stocks has been extremely uniform, suggesting little differentiation by investors among individual MLPs.
WSJ: Rise of Energy Master Limited Partnerships Has Some Concerned
When you sell your MLP units, your capital gain may be larger (or the loss will be smaller).
JPMorgan Alerian MLP ETN ( AMJ) launched more than a year ago and is the largest and most liquid.
More important, dividends on the Alerian MLP Index have risen 25% since 2007.
Ensure the MLP is backed by sound financials and an able chief executive.
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To go with a solid, dividend-paying energy infrastructure MLP, go with Kinder Morgan.
Alliance Resource Partners LP (ARLP) is an MLP that digs the coal out of the ground that it owns.
Oilfields and natural CO2 reservoirs are not like MLP-style toll roads at all.
Action to take: Buy the JPMorgan Alerian MLP Index ETN (NYSE: AMJ) .
At a recent MLP investor conference sponsored by NAPTP, executives were abuzz with excitement about their quest for investment-grade status.
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There are now more than 13 MLP ETPs on the market, with very little differentiation beyond weighting and selection strategies.
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