Infracap MLP Fund: Numbers Do Not Lie

1. Infracap MLP Fund: Numbers Do Not Lie We explained why distribution was not covered the previous period. Another article pointed out that excluding the short position losses, distribution was covered, we agree. We point out why we cannot ignore losses on short positions. We do deep due diligence work. Sometimes we miss things. It happens. So when someone references our work and contradicts what we say, it is always a useful exercise to revisit our conclusions. We just wrote a detailed piece explaining why Infracap MLP ETF's (AMZA) distribution was not covered. Another Seeking Alpha Author pointed out (very respectfully we might add) that excluding losses on short positions, the distribution was indeed covered. He added that these losses should be ignored in the grand scheme because they will contribute to stable share price. We present our views below. For more information visit: https://www.infracapfunds.com/ Excluding the losses on short positions, is the distribution is covered? We did take great pains to show this slide in the last article. The point being in the absence of short position losses, the distributions were covered. The rebuttal offered reached the same conclusion using average share counts and distributions at the new rate. To compute a reasonable estimate of what covering the current distribution policy would have cost, we take the average of the starting and ending share count over the six-month period and multiply it by six, eleven-cent payouts, arriving at an assumed share count of 70,650,004 and total payout burden of $46,629,002.64. Adding this burden to the total fund expenses, we get a total of $52,981,662.64 against total fund distributable cash flow of $53,791,356, implying that the distribution was indeed covered. We agree on something, that the distribution is covered when short positions are ignored. However, while we did it to emphasize that short selling really hurt the fund, the other author believes we should disregard this as a one-off error. We show below why there are problems in ignoring this.