Master limited partnerships have been popular investments as investors have sought out the relatively stable cash flows offered from the assets. With the growing interest in the area, Barclays has launched its first MLP exchange traded note under its iPath line.
The iPath S&P MLP ETN (NYSEArca: IMLP), which is linked to the performance of the consolidated Volume-Weighted Average Price level of the S&P MLP Index, recently began trading. The underlying benchmark tracks partnerships classified in the GICS Energy Sector and GICS Gas Utilities Industry.
MLPs build, acquire and operate transportation assets. While investors link MLPs with energy, specifically natural gas and crude oil, they are more involved with transporting the commodities. Consequently, the performance of MLPs is less dependent on commodity prices than on how much of the commodity is pushed through. For instance, the MLPs profit the same if crude oil cost $50 dollars a barrel or $100 dollars a barrel. [Master Limited Partnerships]
“As investors continue to seek out investments with higher yield, this ETN offers the potential for income along with upside appreciation via index-linked exposure to US energy infrastructure-focused partnerships,” Kevin Murphy, Head of US Equity and Funds Solutions at Barclays, said in a press release.