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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Value in MLP Tax Structure |
Seeking Alpha - Sept. 7, 2010 - by Brian Sylvester
Wunderlich Securities Senior Analyst Ethan Bellamy is another success story in a considerable line of exceptional MLP analysts. He focuses on about 15 MLP names, including a number of closed-end funds. He believes the tax advantages of the MLP structure will eventually allow MLPs to become a "stalwart" asset class. "Ultimately, capital is going to flow where it is best treated," he says, "MLPs offer pretty significant value propositions for an investor." In this exclusive interview with The Energy Report, Ethan talks about his favorite closed-end funds and some unprecedented opportunities in the upstream MLP space.
The Energy Report: Today we're talking with Ethan Bellamy, an analyst with Wunderlich Securities. Ethan, please tell us about yourself and your coverage sector.
Ethan Bellamy: I started out as a junior analyst covering cable and media at Stifel Nicolaus and Co. Then I got a job covering MLPs before I was lured to the buy side at Lehman Brothers, which was a shorter-lived experience than I would've hoped. I've been with Wunderlich for two years. My coverage list is a gathering of direct MLPs and closed-end MLP funds. I cover about 15 names, everything from propane to coal to the closed-end funds to oil and gas production to pipelines. I've either owned, shorted or written research on just about every MLP out there.
TER: That's quite a range of MLP experience. Ethan, we've seen about a 25% increase in dollar volume flowing into MLPs this quarter versus the same quarter last year. What's driving that increase and what sort of names are those dollars headed toward?
EB: Fund flows into MLPs can really be attributed to a bullish "perfect storm" phenomenon. First, you have the launch of two de novo MLP closed-end funds at more than $1 billion each. We also had two follow on offerings in existing MLP closed-end funds, Kayne Anderson MLP Investment Company (KYN) and Fiduciary & Claymore MLP Opportunity Fund (FMO), which raised another $260 million. All four of those vehicles have to rapidly put that money to work in order to pay their distributions. That's been the primary driver of fund flows into the large and mid-cap MLPs that we've seen since mid-May. We're now coming to the end of the three-month window in which those two big initial public offerings of closed-end funds have been put to work. I wouldn't be surprised to see a short-term period of MLP underperformance as that capital deployment subsides.
The "perfect storm" is being further enhanced by the big macroeconomic trend we're seeing in U.S. Treasuries. The benchmark 10-year T-Bills just hit 2.5%. That means risk-free yields are really offering very little income, so investors are forced to look elsewhere.
We're also seeing significant fear of rising personal income tax rates for 2011 if Congress allows the Bush tax cuts to expire. With the additional taxes for "Obama Care," most people recognize that the cash from the "helicopter" stimulus plan we've had has to be paid by somebody. That somebody is going to be wage earners in the next two decades through higher taxes. On a relative basis, MLPs offer a tax-deferred income stream that looks a lot like municipal bonds; a municipal bond is tax exempt and MLPs are tax deferred until you sell. That looks pretty attractive to people considering the likelihood of higher taxes in the future.
For the complete article visit Seeking Alpha
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| Stuff to look at |
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Income Security Recommendation January 2013 Issue.
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