Master limited partnerships, or MLPs, represent an investment in energy infrastructure in North America.
MLPs own, operate and build energy infrastructure assets such as pipelines, storage facilities and processing plants.
One of the advantages of MLPs is that they are able to charge leases and tolls on their infrastructure assets that are inelastic with respect to traditional energy demand. In addition, their corporate structure allows them to pay out a significant portion of operating profit in the form of quarterly dividends.
Related: 2 Preferred Stock ETFs Gain New Arrival
This makes them a potential income opportunity for investors looking to boost the yield on their portfolio above current low interest rate levels.
The Alerian MLP ETF (NYSE: AMLP) is the largest ETF in this segment, with over $8.5 billion invested in 25 ...
More...