Before oil prices started slumping, there was a belief that master limited partnerships (MLPs) and the exchange-traded funds holding those stocks could be sturdy during oil bear markets.
The reasoning was simple. MLPs typically are not engaged in the exploration and production of oil and petroleum-related products. MLPs' business models are more dependent on the volumes of natural gas and oil moving through their pipelines than commodities prices – so conventional wisdom previously dictated.
While that still may be the case, MLPs and MLP ETFs have been hit by a double whammy of sliding oil prices and fears regarding higher interest rates.
The Asset Class Exception
Surprisingly, investors have remained dedicated to the asset class. For example, the Alerian MLP (NYSE: AMLP) is off 24.6 percent just this year, but that ETF has hauled in more than $454 million in new assets year-to-date.
“And while MLP ETPs long have been viewed as ...
/www.benzinga.com/trading-ideas/long-ideas/15/10/5940535/pipeline-problems-mlp-etfs-try-to-get-it-together alt=Pipeline Problems: MLP ETFs Try To Get It Together>Full story available on Benzinga.com
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