The UBS ETRACS 1x Monthly Short Alerian MLP Infrastructure Total Return Index ETN (MLPS) tracks the Alerian MLP Infrastructure Total Return Index (AMZIX). AMZIX includes the same constituents as the Alerian MLP Infrastructure Index (AMZI). Additionally, it includes the distributions from its constituents for return calculations—called a “total return.”
Its top five constituents include Enterprise Product Partners LP (EPD)—which has a weightage of 10.34%, Plains All American Pipeline (PAA)—7.47%, MarkWest Energy Partners (MWE)—7.47%, Magellan Midstream Partners (MMP)—7.27%, and Energy Transfer Partners (ETP)—7.23% (figures as per Alerian).
What’s unique about MLPS
MLPS is designed to provide short exposure to the MLP infrastructure sector by tracking the inverse performance of AMZIX plus a fixed income return based on a hypothetical 91-day Treasury bill portfolio, less investor fees.
Performance this year
Year-to-date (as of December 10), MLPS has declined in price from $39.43 to $38.67.
The above graph notes that MLPS’s performance is better than that of the other long ETN products we have discussed so far whose performances have dipped along with their benchmarks.
This is because MLPS tacks the inverse performance of AMZIX. MLPS is therefore a good option for retail investors bearish on AMZIX.
Continue on to the next part of this series to read about UBS’ natural gas–related MLP ETN.