MLPs - A Different Kind of Energy Sector Play

ETF Trends publisher Tom Lydon discussed JPMorgan Alerian MLP Index ETN (AMJon this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

After the recent selling, master limited partnerships are starting to look like an attractive yield-generating alternative in an ongoing low yield environment.

MLPs are a different kind of energy sector play; MLPs primarily deal with the distribution and storage of energy products, so their business model is less reliant on the commodities market since they profit off the quantity of oil and natural gas they are able to move around.

Consequently, MLPs have historically shown a weaker correlation to energy prices over longer periods.

AMJ tries to reflect the performance of the benchmark J.P. Morgan Cushing 30 MLP Index. Top holdings include mid-stream energy companies like NGL Energy, American Midstream partners, Tallgrass Energy, Suburban Propane Partners and Energy Transfer Equity.