Alerian MLP ETF Disappoints in June 26 Week

The Alerian MLP ETF (AMLP) fell 1.61% in the week ending June 26. It tracks an index of 25

midstream MLP (master limited partnership) companies like Plains All American Pipeline

Partners (PAA), Targa Resources Partners (NGLS), and ONEOK Partners (OKS). Together,

these three companies account for ~17% of AMLP.

MLPs are special companies that pay most of their earnings as distributions to unitholders. To

understand MLPs better, read our primer on MLPs. AMLP is an easy way for investors to gain

low-cost, diversified exposure to the midstream sector. Midstream companies help transport,

process, and store energy.

Comparing performances

AMLP was the biggest loser among our comparable group of stock ETFs. The only ETF among

our select group that ended higher last week was the Energy Select Sector SPDR ETF (XLE).

Read Part 1 to learn more about XLE’s performance last week.

About AMLP

AMLP holds midstream MLP companies whose earnings are typically linked to the volumes of

the energy products that they transport. Also, many of them enter into long-term fixed-fee

contracts with their customers. This makes them relatively more resilient to slumps in energy

prices compared to their upstream, services, or even integrated peers.

However, since MLPs are typically bought for their regular income through distributions, MLP

units are also impacted by movements in the interest rates. Check out our coverage on the sector

on our Fixed Income ETFs page.

Usually AMLP is among the safer bets for investors to play energy prices.