AMZ fell 6.7% last week
MLPs and the US market went through turmoil last week. The Alerian MLP Index (^AMZ), which includes 50 energy MLPs, saw its second-highest weekly decline in the past year. AMZ fell 6.7% last week and ended at 282.3. At the same time, the S&P 500 (^GSPC) (SPX-INDEX) fell 3.6%.
Out of the total 93 MLPs, 89 ended in the red and four ended in the green. The four gainers were Sprague Resources (SRLP), Ferrellgas Partners (FGP), Navios Maritime Midstream Partners (NAP), and Suburban Propane Partners (SPH).
Among the top MLPs, Plains All American Pipelines (PAA), Enterprise Products Partners (EPD), Williams Partners (WPZ), and Energy Transfer Partners (ETP) fell 10.4%, 7.8%, 7.4%, and 7.1%, respectively. The Alerian MLP ETF (AMLP) ended the week 5.6% lower.
MLPs fell sharply on Friday amid the increase in US bond yields and a rise in inflation. MLPs, which are generally considered an investment option that generates income, become less attractive with the rise in US Treasury yields. Also, the cost of borrowing increases. MLPs depend on external borrowing to fund growth projects.
The sharp decline in natural gas prices and weakness in crude oil prices could have caused MLPs to fall last week. Natural gas fell 18.8% last week and ended at 2.85 per MMBtu (million British thermal units).
AMLP and the JP Morgan Alerian MLP Index ETN (AMJ) saw net outflows of $111.7 million and $23.0 million funds last week, respectively. After last week’s huge outflow, AMLP has seen a net outflow of $21.5 million since the start of the year.
Next, we’ll discuss last week’s top MLP losers.