“It matters because you have a lack of equilibrium in the marketplace, whereby the sum of the parts is worth less than the asset as a whole,” Agam Kothari, director of equity trading at Citigroup, said in the article. “When that’s driven purely due to technical factors, that should always be a wake-up call to investors.”
Specifically, the bank has stated that “investors that pay a premium for the ETNs could incur significant losses if that investor sells its ETNs at a time when some or all of the premium is no longer present.”
For more information on master limited partnerships, visit our MLPs category.
Max Chen contributed to this article.