FMD Capital Management

Posts Tagged: master limited partnership

My New Favorite MLP ETF

Written by David Fabian, May 10th, 2017

Income investors have always had an affinity for master limited partnerships, or MLPs.  These unique vehicles offer exposure to the energy sector through a high yield, equity-like security.  Their business models and tax structures are such that they can pass through a great deal of their profits to shareholders in the form of dividends.  This makes them coveted for both their unconventional returns vs stocks or bonds in addition to their healthy income streams. Read more

MLP ETFs Have Ridden The Energy Recovery Wave In 2016

Written by David Fabian, October 25th, 2016

The multi-year plunge in oil and natural gas prices has been partially arrested in 2016 and one high yield investment sector is riding the recovery wave higher.  Master limited partnerships, or MLPs, are operators of pipeline, storage, and energy infrastructure assets primarily focused in North America.

These publicly traded entities enjoy a special tax advantage that allows them to return a large portion of their operating income to shareholders in the form of dividends.  As such, they are coveted by income investors for their above-average yields and alternative business models compared to conventional dividend stocks or bonds.

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Value Is Scarce Among Income-Generating ETFs

Written by David Fabian, August 03rd, 2016

The definition of value is a fierce debate among investors that seek to find intrinsically underpriced assets.  Some stand their ground on historical fundamentals like price/earnings or price/book ratios.  Others look strictly at price relative to other potential opportunities as a measure of opportunity.

The picture becomes even more complicated when you try to compare or overlay differing asset classes.  Income investors often blur the lines between bonds, dividend paying stocks, and alternative income assets.  Read more

2 High Yield ETFs Signal Credit Upheaval

Written by David Fabian, December 08th, 2015

Years of low interest rates and minimal inflation have resulted in many ETF investors adopting these investments as surrogates for more conservative options.  Furthermore, a prolonged period of relatively low volatility may have lulled these same participants into a false sense of security.

The lesson that many are learning is that a reach for yield also comes with an associated greater risk of volatility in price.  That volatility may be finally starting to rear its ugly head, as two heavily owned high yield funds have fallen precipitously in recent months.

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The Benefits And Risks Of MLP ETFs

Written by David Fabian, June 30th, 2015

Master limited partnerships (or MLPs) have long been favored by income investors for their high yields and non-correlated returns. Most MLPs operate a toll-road style infrastructure of pipelines, storage facilities, and transport for the oil and gas industry. Because of their specific legal structure, they are able to return a high portion of their earnings to shareholders in the form of dividends.

While many investors prefer to own publicly traded MLPs directly, you can also access a basket of these securities through an exchange-traded fund (ETF).  Read the complete article at