“Even during the financial crisis in 2008, the pipeline cash flows increased,” Jeremy Held, director of research of ALPS, said in the article.
Abby Woodham, a Morningstar analyst, recommends the JP Morgan Alerian MLP Index ETN (NYSEArca: AMJ), which has a 4.9% yield. However, exchange traded notes are subject to the credit worthiness of the issuing bank.
Nevertheless, “because you are dealing with JPMorgan, the risk of default is minimal,” Woodham added.
On the other hand, if you are worried about credit risk, there are MLP ETFs available, like the ALPS Alerian MLP ETF (NYSEArca: AMLP), which has a 6.0% yield. However, investment researcher Morningstar was out with a warning recently on AMLP. Morningstar’s caution flag is related to a complicated tax issue associated with MLPs. [Tax Warning on MLP ETF]
MLP ETFs include:
- First Trust North American Energy Infrastructure Fund (NYSEArca: EMLP)
- Global X MLP ETF (NYSEArca: MLPA)
- Yorkville High Income MLP ETF (NYSEArca: YMLP)
MLP ETNs include:
- Credit Suisse Master Limited Partnerships ETN (NYSEArca: MLPN)
- Morgan Stanley Cushing MLP High Income Index ETN (NYSEArca: MLPY)
- UBS ETRACS Alerian MLP Infrastructure ETN (NYSEArca: MLPI)
- UBS ETRACS 2xMonthly Leveraged Long Alerian MLP Infrastructure ETN (NYSEArca: MLPL)
- UBS ETRACS Alerian Natural Gas MLP ETN (NYSEArca: MLPG)
- UBS E-TRACS Alerian MLP Index ETN (NYSEArca: AMU)
- UBS ETRACS Wells Fargo MLP Index ETN (NYSEArca: MLPW)
- UBS ETRACS 1xMonthly Short Alerian MLP Infrastructure TR* ETN (NYSEArca: MLPS)
For more information master limited partnerships, visit our MLPs category.
Max Chen contributed to this article.