The huge inflows into the MLP investments during the low interest rate environment, along with tepid outflows from the asset class in recent week following the Fed’s rate outlook, suggest that investors could pull out of MLPs once rates rise.
Selling pressure is already underway as many MLP-related ETFs have been declining. For instance, on Friday, AMLP, Global X MLP ETF (NYSEArca: MLPA), Yorkville High Income MLP ETF (NYSEArca: YMLP) and Direxion Zacks MLP High Income Shares (NYSEArca: ZMLP) all touched new 52-week lows.
Over the past year, AMLP declined 9.8%, MLPA fell 9.6%, YMLP plunged 35.5% and ZMLP retreated 24.6%.
For more information on master limited partnerships, visit our MLPs category.
Max Chen contributed to this article.