MLPs have historically shown a weaker correlation to energy prices over longer periods as MLPs act more like energy toll roads, profiting on the volume of oil moving through their pipelines. However, as crude oil prices fell off, investors were concerned about the energy industry’s ability to keep pumping oil, which would affect the volume of crude passing through MLPs. With oil prices rebounding, MLPs are also gaining traction.
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“MLPs should also not be viewed as an alternative to fixed-income or with any kind of “bond-like” approach. They carry far different characteristics than bonds and may not be suitable as a substitute for core fixed-income exposure,” adds ETF Daily News.
For more news on MLPs, visit our MLP category.
ALPS Alerian MLP ETF (NYSEArca: AMLP)
Tom Lydon’s clients own shares of AMLP.