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Enterprise Products Partners L.P. Message Board

  • steveschrift steveschrift Feb 14, 2014 11:22 AM Flag

    EPD a strong powerful infrastructure MLP, only problem only yielding about 4% why not buy MLPL

    MLPL gives you more diversification within the infrastructure MLP's including EPD as it's largest holding.
    This is a leveraged ETN, similar to an ETF. This leverage gives you fat juicy distributions of over 10% that's no typo. If you truly believe long term in the MLP infrastructure space this is a no brainer while my distributions grow at over 15% annum and my beginning yield today is over 10%.

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    • Does ETN borrow money ,is that why the yield is higher ?

      • 1 Reply to callingdrcasey
      • They will use option strategies to enhance the return and yield. However they must maintain that leveraged position at all times. Even if it defies common sense. No buts about it.

        Premiums from selling puts will enhance the yield as long as the share price is basically even to positive(but destroy your equity if share prices drop, especially if they tank over night) Call buying enhances the share appreciation. It gets very complicated as all contracts have to roll forward with many expirations. Assets will also decay over time, especially purchased calls, when share price is stagnant . This is a very simplistic explanation of a very complicated tool.

        ETNs can be difficult to short but that's the play in a leveraged long fund in difficult times.

        A leveraged fund should only be used in times of fast moving share prices. Years of gains can be wiped out in a matter of minutes if the trend turns against you. They certainly are not for retirement aged income seeking investors. They are widowmakers.

        Only a complete fool would advocate the average investor to go anywhere near them!

    • I'm a one woman man easier to keep track of. I'm sticking with this great company. Is boardwalk in that mlpl?

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