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Credit Suisse’s MLPN ETN Outperformed XLE Last Week

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Credit Suisse X-Links Cushing MLP Infrastructure ETN

The Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN) fell 6.3% in the week ended August 21. In comparison, the ETRACS Alerian MLP Infrastructure Index ETN (MLPI) fell 5% and the JPMorgan Alerian MLP Index ETN (AMJ) fell 5.1% over the same timeframe. The broad-market SPDR S&P 500 ETF Trust (SPY) fell 5.6% and the Energy Select Sector SPDR ETF (XLE) fell 8.4% during the week.

MLPN traded at a yield of 5.9% at the end of last week compared to 5.5% at the end of the previous week.

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The Cushing 30 MLP Index

MLPN tracks the Cushing 30 MLP Index. The Cushing 30 MLP Index is an equal-weighted index focused on midstream MLPs. It uses a formulaic valuation methodology to rank MLPs for inclusion in the index. The methodology focuses on financial performance instead of market capitalization. The MLPs in the index are reset to an equal weight in the fund’s portfolio every quarter.

The index only tracks midstream MLPs. It doesn’t hold upstream and downstream MLPs. Upstream and downstream MLPs are generally considered more sensitive to commodity prices. The Cushing 30 MLP Index fell more than the Alerian MLP Index (AMZ) and the Alerian MLP Infrastructure Index (AMZI), which we discussed in the previous parts of this series. The above graph compares MLPN’s returns for the week with those of its underlying index, SPY, and XLE. All returns include dividends.

Index components

Alliance Resource Partners (ARLP), Ferrellgas Partners (FGP), Western Gas Partners (WES), and EnLink Midstream Partners (ENLK) are some of the midstream MLP constituents of the Cushing 30 MLP index. Together, these four MLPs form ~13.3% of the index.

The top losers among the index’s constituents included Plains All American Pipeline (PAA), Sunoco Logistics Partners (SXL), ONEOK Partners (OKS), Targa Resources (NGLS), DCP Midstream Partners (DPM), and NGL Energy Partners (NGL), which fell 8.4%, 9%, 8.8%, 13%, 11.2%, and 10.6% respectively, during the week.

Next in this series, we’ll analyze the weekly performance of the Yorkville High Income MLP ETF (YMLP).

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