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Recommendation: Buy Alerian MLP ETF (AMLP). Green & Gold Fund. Alerian. Alerian is an independent company that is a leader of MLP-market intelligence, providing benchmarks, data sets, and analytics that are used extensively by a wide range of stakeholders.

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Green gold fund

Alerian

  • Alerian is an independent company that is a leader of MLP-market intelligence, providing benchmarks, data sets, and analytics that are used extensively by a wide range of stakeholders.

  • The Alerian MLP ETF seeks investment results that correspond to the Alerian MLP Infrastructure index.


Green gold fund

MLP Refresher

  • MLPs are midstream transportation, storage, and processing companies of energy commodities.

  • Because of the steady stream of income which is largely independent of swings in commodity prices, MLPs are able to qualify for special tax treatment, avoiding corporate taxes at the federal and state levels.

  • MLPs pay regular cash distributions on the order of 5-8% of share price with healthy yearly growth rates.

  • We are interested in MLPs for their steady payouts and performance in a low interest rate environment and an overhanging threat of deflation.



Green gold fund

AMLP ETF Valuation

* Actual weighted average 3yr dividend growth was 11% per year. Forecasts have the growth rate at approximately 5%.




Green gold fund

Investment Thesis

  • Uncertainty in the American economy and markets paired with historically low interest rates calls for a steadily-performing stock with a strong dividend yield that can be expected to attract more investors.


Green gold fund

Portfolio Placement / Recommendation

  • Sector : Energy

  • Industry Group: Midstream Oil/Gas

  • Current Holdings: FEN, HES, PXJ, SU

  • Target Sector Allocation: 8.54%, $37,325

  • Current Sector Allocation: 7.15% , $31,234

  • Remaining Allocation: 1.39%, $6,091

  • BUY 350 shares of AMLP at Limit of $15.50 ($5,425)

  • BUY 100 shares of AMLP at Limit of $14.10 ($1,410; 7.1% yield)

  • Holding Period/Exit Strategy: 2-5 years. Sell if fundamentals change substantially (e.g. tax treatment, rate increases).