Solactive AG has launched the Solactive MLP Bond Index, first in the market to give access to this type of US companies which has been raising attention recently, due to their interesting payout potential combined with relative safety compared to other corners of the energy world.
Astrid Ludwig, Head of the Bond & Complex Team at Solactive, said: “MLPs have generated a growing interest from the market over the past three years, with already 18 ETFs offering exposure to MLP via equities but none so far via bonds. The Solactive MLP Bond Index is composed at nearly 95% of bonds rated as investment grades, which is interesting when looking for capital preservation and a modest profit potential over the long term.”
A Master Limited Partnership (MLP) is an American company defined as a limited partnership publicly traded on an exchange. To qualify as MLP, a partnership must generate 90% of its revenues or more from ‘qualifying’ sources -- mostly related to the production, processing or transportation of oil, natural gas and coal, some real estate enterprises also qualify. MLPs are well-known to combine the tax benefits of a limited partnership (money is taxed at the unit holders’ level) with the liquidity of a publicly traded company.