Citigroup Launches MLP ETN

By
Hung Tran
September 26, 2013
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Citigroup’s MLP ETN is hitting the market Friday.

Citigroup is expanding its exchange-traded note lineup by listing its C-Tracks M/H MLP ETN, (MLPC) on the on NYSE Arca Friday, Sept. 27. The firm is joining an increasingly crowded MLP space, currently dominated by the $6.9 billion Alerian MLP (AMLP).

The ETN’s index, the Miller/Howard MLP Fundamental Index, measures the performance of 25 energy master limited partnerships selected quarterly based upon certain quantitative fundamental factors of publicly traded MLPs, according to the ETN’s prospectus.

The C-Tracks ETNs are unsecured senior debt securities issued by Citigroup. MLPs are U.S. energy-infrastructure-related assets that were created in the mid-1980s and have been used by many as income-related investments. Much like an allocation to U.S. Treasurys, MLPs deliver solid yields.

They are essentially partnerships that trade on a stock exchange like a corporation, but without federal income tax liability at the entity level, because they derive most of their revenues from steady fees such as interest, dividends, real estate rents, transportation and storage.

Because MLPs are well known for the steady dividends they deliver, they have grown in popularity with investors looking for income at a time of compressed yields in the more traditional fixed-income space.

 

ETF DAILY DATA

Investors plowed money into currency-hedged equity funds like ‘HEDJ’ and ‘DBEF’ on Wednesday, March 4, while yanking assets out of sundry bond funds, such as ‘HYG.’ Total U.S.-listed ETF assets dropped to $2.084 trillion as a market pullback offset net inflows.

Sizable outflows from various iShares bond funds paced that firm’s outflows on Wednesday, March 4. Total U.S.-listed ETF assets ended the day at $2.084 trillion.

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