An investor cannot invest directly in an index and index performance does not reﬂect the deduction of any fees, expenses or taxes. The Alerian Midstream Energy Index is a capped, ﬂoat-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash ﬂow from midstream activities involving energy commodities. The Wells Fargo MLP Index is a capitalization-weighted index of energy MLPs with market capitalizations of at least $200mn at the time of inclusion.
Data quoted represents past performance, which is no guarantee of future results. The views and opinions in the preceding commentary are as of the date of publication and are subject to change without notice. There is no guarantee that investors will experience the type of performance reﬂected in this commentary. There is no guarantee that any historical trend referenced in this commentary will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that a market forecast made in this commentary will be realized. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment, tax or legal advice and is not intended to predict or depict performance of any investment. Investors should consult their investment, tax or legal professional with respect to their individual circumstances. No representation or warranty is made as to the efficacy of any particular strategy or fund, or the actual returns that may be received
Risks of Investing in MLP Securities. An investment in MLPs involves risks that diﬀer from a similar investment in equity securities, such as common stock, of a corporation. Holders of equity securities issued by MLPs have the rights typically aﬀorded to limited partners in a limited partnership. As compared to common shareholders of a corporation, holders of such equity securities have more limited control and limited rights to vote on matters aﬀecting the partnership. There are certain tax risks associated with an investment in equity MLP units. Additionally, conﬂicts of interest may exist among common unit holders, subordinated unit holders and the general partner or managing member of an MLP; for example, a conﬂict may arise as a result of incentive distribution payments. MLPs are subject to significant regulation and may be adversely aﬀected by changes in the regulatory environment, including the risk that an MLP could lose its tax status as a partnership. MLPs may trade less frequently than larger companies due to their smaller capitalizations, which may result in erratic price movement or difficulty in buying or selling. MLPs may have additional expenses, as some MLPs pay incentive distribution fees to their general partners. The value of MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If MLPs were subject to U.S. federal income taxation, distributions generally would be taxed as dividend income. As a result, after-tax returns could be reduced, which could cause a decline in the value of MLPs. If MLPs are unable to maintain partnership status because of tax law changes, the MLPs would be taxed as corporations and there could be a decrease in the value of the MLP securities.
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About Cohen & Steers
Cohen & Steers is a global investment manager specializing in liquid real assets, including real estate securities, listed infrastructure, commodities and natural resource equities, as well as preferred securities and other income solutions. Founded in 1986, the firm is headquartered in New York City, with offices in London, Hong Kong and Tokyo.
Publication Date: January 2019. Copyright © 2019 Cohen & Steers, Inc. All rights reserved.