MLPN Gained 2%, Underperformed MLPI Last Week



MLPN gains 2.0%

The Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN) rose 2.0% in the week ended October 2, 2015. In comparison, the ETRACS Alerian MLP Infrastructure Index ETN (MLPI) and the JPMorgan Alerian MLP Index ETN (AMJ) rose 3.6% and 3.8%, respectively, over the same time frame.

The broad market SPDR S&P 500 ETF (SPY) rose 1.1%, and the Energy Select Sector SPDR ETF (XLE) rose 2.4% during the week. MLPN traded at a yield of 6.6% 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 2.0% during the week, while the Alerian MLP Index (AMZ) rose 3.9%.

AMZ is a broader index of MLPs, including upstream and downstream MLPs. AMZ’s rise was also more than the Alerian MLP Infrastructure Index (AMZI), which rose 3.6%. AMZI only tracks midstream MLPs. We discussed these indices in the previous parts of this series.

MLPN underperformed AMJ and MLPI last 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 MLPI, its underlying index, and AMJ.

Top Cushing 30 MLP Index gainers

The top MLP gainers among the index’s constituents in the week ended October 2 include Rose Rock Midstream (RRMS), Plains All American Pipeline (PAA), Enbridge Energy Partners (EEP), Magellan Midstream Partners (MMP), and Tallgrass Energy Partners (TEP). They gained 15.1%, 13.0%, 9.4%, 8.6%, and 8.5%, respectively, during the week.


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