Investors in search of big dividends that come with exposure to a sector they believe in need not look any more.
A sector I have been touting for years and that I have exposure to for clients through a variety of ETFs and stocks is the master limited partnerships (MLPs).
There are a variety of ETF/ETN/closed-end funds available to investors. We currently own two such vehicles for clients. The Fiduciary/Claymore MLP Opportunity Fund ($FMO) was bought years ago before any MLP ETN/ETF was available. The fund has been a big winner for us and currently pays a dividend of 7.2%.
We also have exposure to the JPMorgan Alerian MLP ETN ($AMJ), which pays a dividend of 5.3%.
If I were looking to buy now there are other options for investors such as the Alerian MLP ETF ($AMLP). The ETF is made up of 25 MLPs that concentrate on the energy sector, just as nearly all MLPs traded in the US do. The current dividend is about 6.4% based on the last 12 months. The expense ratio is 0.85%.
Top Holdings in $AMLP are: Kinder Morgan Energy Partners ($KMP), Enterprise Products Partners ($EPD), and Magellan Midstream Partners ($MMP).
Keep in mind there was a merger earlier this week involving Kinder Morgan and I expect more mergers in the energy pipeline sector, which is good for the MLPs.
If you want more individual MLP names for investing ideas go to this link for the 25 that make up $AMLP:
No comments:
Post a Comment