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MLPN Rises 0.13%, Outperforms MLPI Last Week

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MLPN rises 0.13%

The Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN) rose 0.13% in the week ended September 18. In comparison, the ETRACS Alerian MLP Infrastructure Index ETN (MLPI) and the JPMorgan Chase Alerian MLP Index ETN (AMJ) fell 0.17% and 0.09%, respectively, over the same time frame.

The broad-market SPDR S&P 500 ETF (SPY) fell 0.13%, and the Energy Select Sector SPDR ETF (XLE) rose 0.33% during the week. MLPN traded at a yield of 6.31% at the end of last week.

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Cushing 30 MLP Index

MLPN tracks the Cushing 30 MLP Index, 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 Cushing 30 MLP Index only tracks midstream MLPs. It doesn’t hold upstream and downstream MLPs. These MLPs are generally considered more sensitive to commodity prices. The Cushing 30 MLP Index rose 0.50% during the week, while the Alerian MLP Index (AMZ) fell 0.41%.

AMZ is a broader index of MLPs including upstream and downstream MLPs. AMZ’s fall was the same as the Alerian MLP Infrastructure Index (AMZI). AMZI only tracks midstream MLPs. We discussed these indices in the previous parts of this series.

MLPN marginally outperformed AMJ and MLPI this week, as it did in the previous week. Over the last 12 months, MLPN has generated -31% total returns, which is similar to AMJ’s returns. MLPI’s 12-month returns are -28%. The above graph compares MLPN’s returns for the week with those of MLPI, its underlying index, and AMJ.

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 ~13.30% of the index.

The top gainers among the index’s constituents in the week ended September 18 include NGL Energy Partners (NGL), Targa Resources Partners (NGLS), and ONEOK Partners (OKS). They gained 10.5%, 10.2%, and 8.1%, respectively, during the week.

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