The Sky Isn’t Falling for MLPs

Chicken Little is a large MLP investor. In the recent period of declining crude prices, virtually all energy-related assets have been impacted, including MLPs – despite their largely fee-based business models. Since the beginning of the year, MLPs (as measured by the Alerian MLP Index, AMZ) have lost -22.4%, underperforming the S&P 500 Energy Index and only somewhat bettering crude itself (Figure 1). What makes MLP underperformance unexpected is the substantially lower direct commodity exposure... Continue reading.