No High-Yield Relief For MLP ETFs Post Fed

The Fed went ahead and hiked the short-term interest rates after almost a decade and investors are probably looking for high-yield but stable investing tools to weather the prospective bounce in the U.S. Treasury yields, but this search will not be easy now. Investors need to be very careful while picking high-yields securities in the present market condition.
This is because of the fact that the Fed hike is not the only threat to the market, a below-$40 oil price seems to be the main culprit now. As a result, conventionally high-yield securities MLPs, which are normally stable in nature too, are now having a bloodbath.
MLPs are involved in the business of transportation and storage of oil and gas, and they are suffering even more than the oil producers from the downturn in the market. MLPs primarily benefit from an uptick in oil production.
Oil Price Slump Hurts
Now oil prices are in a freefall and hovering around a seven-year low following the prospect of more production from OPEC nations amid supply glut and falling demand. So energy MLPs are being crushed. Now, Russia's deputy finance minister expects oil price to range between $40 and $60 per barrel in the next seven years. So one can easily expect how prolonged the pain could be for the MLPs.
As you may know, MLPs often operate pipelines or similar energy infrastructures that make it an interest-rate sensitive sector. This group catches investor eye as the players in it do not pay taxes at the entity level and... Read more