Episode 58: The Destruction of MLP Closed End Funds
In this week’s podcast, Simon Lack discusses the irresponsible management of MLP closed end funds
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In this week’s podcast, Simon Lack discusses the irresponsible management of MLP closed end funds
I quite agree with you about MLP CEFs, which I have never owned. Not only do those funds use leverage inappropriately but they also own MLPs that don’t meet my specific investment criteria. On the other hand, since the horrors of March I was able to buy at incredible bargain prices and therefore irrationally high yields, more units in EPD, CEQP and DCP, which have since appreciated nicely.
I do own a leveraged Nuveen municipal bond fund which I also have owned for some time and which is slightly above my purchase price. Many muni bond funds are leveraged about 30% but that is a far different situation than borrowing against MLP equities. I am able to achieve a 4.5% tax free return, as opposed t the municipal bonds which I own outright which yield about half that percentage. yield
I had to check the numbers myself. SL’s USAI is down less than 8% YTD. Tortoise’s NTG (which has many of the same constituent companies) is down more than 80% YTD.