This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

New MLP Fund Looks to Make Investing Simpler and Cheaper

Stocks in this article: MLPX KMI KMP AMLP

The largest holding in the fund is Kinder Morgan (KMI), at 9% of the fund. KMI is an affiliate of the widely known Kinder Morgan Partners (KMP). Although KMP, which is a master limited partnership, has a higher yield, KMI still has a healthy 4.26% payout.

Because MLPX just started trading, there is no yield information available for the fund, but the underlying index has a 3.12% yield. If we account for the 0.45 expense ratio, we can calculate a yield of 2.67%, but as always, the fund's actual yield could be different.

The expense ratio bears further mention because it is lower than some of the larger funds in the space with the different structures. The Alerian MLP ETF (AMLP), which has accumulated an impressive $6 billion in assets, has an 0.85% expense ratio plus the tax obligation, which is disclosed at 4%.

AMLP only owns MLPs, and MLPs are usually less volatile than the broad market. MLPX is only 25% in MLPs, so it remains to be seen whether the affiliated companies and other non-MLP holdings combine to offer a similar volatility profile as the Alerian fund. AMLP has performed as hoped for; it has low volatility and a 5.98% trailing yield.

The huge assets in AMLP speak to how popular the MLP space is, and if MLPX can deliver similar yields and similar volatility in a cheaper fund with less complicated tax implications, then it should be a big success.

As a final note, the nuances of the taxation are beyond the scope of this article but are something that any investor interested in MLPs or funds that own MLPs needs to explore with a tax professional in order to determine whether the securities are suitable for his or her portfolio.

At the time of publication, Nusbaum had no positions in companies mentioned, but many of his firm's clients owned KMP

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs