Why You Should Choose Energy Infrastructure MLP

MLPs or Mater Limited Partnership Companies are the companies which enjoy the benefits of a partnership and a public company with its own trading rights. However, many investors have not realized the potential of investing in such companies. If you look, you will find many ETFs and funds growing which is entirely made of MLPs.  AMZA, the InfraCap Active MLP ETF is an actively managed fund that invests in midstream MLPs that collect, process, store, and transport energy products. Few of the top AMZA holdings include Energy Transfer Partners LP, Phillips 66 Partners LP, EQT Midstream Partners LP, NGL Energy Partners LP. AMZA stands out in MLPs because of it active management while most other ETFs track indices.

Another MLP ETF which is based on energy products is Alerian MLP ETF. The fund seeks investment results that correspond to performance of its underlying index, the Alerian MLP Infrastructure Index. The Alerian MLP ETF delivers exposure to Alerian MLP Infrastructure Index which a capped, float-adjusted, capitalization-weighted composite of energy infrastructure MLPs which earn mostly through their operations in the energy products.

You’ll find that most MLPs are found in the energy sector and this has its benefits. There many reasons why you should consider investing in an Energy Infrastructure MLPs.

• Income potential MLPs will pay out majority of the cash flow as quarterly dividends.
• Thematically, MLPs represent investment in the US energy infrastructure over the next years. MLPs own, operate and build energy infrastructure assets such as pipelines, storage facilities, and processing plants.
• There is a lot of growth in the industry. Billions of investment dollars are required in order to keep pace with boom of domestic production of natural gas and oil.
• Many MLPs benefit from inflation-hedged contracts and inelastic energy demand.

There is a lot of potential in seeking MLP as an investment option which the investor hasn’t realized yet. It still remains a lesser known form of investment. However, many financial advisors and professionals have posed the benefits of MLP to their clients and the investment in them is growing. Like in any other form investment, it is important to understand the risk, returns, and their correlation before investment. And lastly, invest smartly!

Source : http://nglenergypartner.tumblr.com/post/155933380081/why-you-should-choose-energy-infrastructure-mlp

Understanding Master Limited Partnerships and Its Benefits of Investing In Them

There are many ways in which a business organization can be formed. It can be a sole proprietorship, partnership, publicly traded, etc. One such type of business organization is Master Limited Partnership (MLP). A MLP is a type of business organization which exists in the form of publicly traded limited partnership. In such type of organization, there are two classes of partners, namely, limited and general partners. Limited partnersare those who simply invest in the organization and provide the capital in exchange of a return whereas general partners are responsible for the day to day operations and receive compensation based on the performance. MLPs are commonly present in the energy industry and even have indices based on their market, for Alerian MLP Index is the leading gauge of energy MLPs.

There are many investors who invest in MLP. MLP investing has its own benefits. Some of them include-

• High Yield – Most MLPs provide a generous yield generally falling in the range if 6%-7%.
• Consistent Distributions over the Year- Many MLPs are stable in running their operations and produce consistent cash flows year after year, making distributions of MLP units very predictable.
• Capital Gains- Usually investors switch to MLP in order to gain tax benefits. Owners of partnerships are only taxed once. When the limited partners get their return on capital, it is taxed at the capital gain rate when they sell these units. The tax is deferred till the time the owners decide to sell and it lower than the income tax rate. Moreover, unlike other energy companies, MLP do not take exposure in commodities giving lesser risk and volatility to investors.
• Lower Cost of Capital – Since taxes are absent at the company level, MLPs have a lower cost of capital than any other corporation which allow MLPs to invest in more projects.

Thus, MLPs are one of the attractive investment options available to an investor. Of course, like any other investment class, even MLPs have their share of risk. Therefore, it is highly important that an investor does a proper analysis of the MLP organization before investing.

Source : http://nglenergypartner.uzblog.net/understanding-master-limited-partnerships-and-its-benefits-of-investing-in-them-1627880