Long-time MLP investor, Matt Reiner, recently gave commentary about Master Limited Partnerships with the Wall Street Journal. When asked how he observes the current MLP market despite a post-election market plunge, Reiner noted that he doesn’t view recent pullbacks as a sign of significant industry headwinds.
MLPs have long been at the center of the United State’s build-out of its energy infrastructure with producers eager to get their products to market. Many investors have put funds into pipeline operators pushing toward energy independence. MLPs have handled transportation and storage networks for gas, oil, energy, and other natural resources for years; and advisors have managed dozens of funds yielding returns that have stumbled in recent weeks.
Since a portion of the proceeds from selling MLP stocks can be counted as ordinary income by investors, it is speculated that the funds’ recent drop is likely tied to concerns that tax rates could signifcantly increase next year.
In the intervew, Reiner goes on further to state his specific position on a few MLPs. He previously preferred funds such as the $4.9 billion JP Morgan Alerian MLP ETN but has shifted to the $412.3 million UBS E-TRACS Alerian MLP Infrastructure ETN. For tax reason’s Reiner, and colleagues, prefer ETNs over rival ETFs in this case.
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