AUTHORS

Edge Capital Research Team

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Update on the MLPs and the Current Dislocation

SUMMARY

Since the inception of Edge we have been investors in infrastructure, including energy infrastructure master limited partnerships (MLPs) with a specific focus on midstream. The weakness in crude oil spot prices since the second half of 2014 first impacted energy exploration and production (E&P) and oil service stocks, then natural gas, and more recently MLPs. As of August 10, MLPs (as measured by the Alerian MLP Index) are down 20% for the year and 30% from their peak nearly 12 months ago. In just the first 10 trading days of August, MLPs are already down 6%, representing 30% of the total return loss this year and are close to matching the 8% decline in June. The selloff has been wide-spread across all types of MLP business models, including midstream and infrastructure, the subsector of the MLP market we have been recommending since inception.

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