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Introducing the MLPL

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About the underlying index

The UBS 2xMonthly Leveraged Long Alerian MLP Infrastructure Index ETN (MLPL) tracks the same index as the UBS ETRACS Alerian MLP Infrastructure Index ETN (MLPI), namely, the Alerian MLP Index (AMZI). The difference between these ETNs is that MLPL provides investors with twice the performance of the underlying index or the AMZI. That is, while MLPI is not leveraged, MLPL is leveraged at 2x.

Here are AMZI’s top five constituents, along with their weightages (per Alerian):

  • Enterprise Product Partners LP (EPD), 10.34%
  • Plains All American Pipeline (PAA),7.47%
  • MarkWest Energy Partners (MWE), 7.47%
  • Magellan Midstream Partners (MMP), 7.27
  • Energy Transfer Partners (ETP), 7.23
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Performance this year

UBS 2xMonthly Leveraged Long Alerian MLP Infrastructure Index ETN saw a slight increase in price from $54.73 to $55.31.

The ETN has paid out $5.77 per note in the past year. Based on its quarterly coupon payment, it is currently yielding about 11.3%. Given the graph above, MLPL would be a good option for investors who are bullish on the AMZI.

In November, TC PipeLines LP (TCP) was the best-performing constituent. TCP saw 15.5% price returns, whereas ONEOK Partners LP (OKS) had price returns of -13.7%.

The next part of this series will cover UBS’ short ETN product tracking AMZI.

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