MLPs

Introduction
Master Limited Partnerships (MLP) are partnerships that are traded like stocks.  The investor (unitholder) is the limited partner and the general partners are the managers.  You get paid from distributions, which are like dividends.  Most MLPs are from utility companies.  There are different kinds of MLPs.  There is some risk involved in having an MLP.  It has been around 35 years and they have their own Electronic Exchange Fund (ETFs)!

Breakdown

• MLPs are taxed as a partnership and liquid like stock.  
• No corporate income tax.
• The unitholder gets quarterly or monthly distributions.
• The general partner determines the amount of $ a unitholder gets in their distributions.                                                      

Different Types of MLPs

Upstream: This deals with finding and digging crude oil and natural gas.

Midstream: This deals with containing and moving crude oil and natural gas.  

Downstream: This deals with selling the crude and gas to customers.  

Risk of MLP

• IF there is a surplus of oil and gas the unitholder may get a smaller distribution.
• If the general partners stop growing the companies the distributions will probably shrink.   
• MLPs have a lot of debt.  Raising interest rates may cut into the distributions.
• Lower oil prices may lead to lower distributions.
• Regulations may decrease distributions.
• The contracts are very complex.
• Tax code changes may minimize distributions.  

MLP ETFs

MLP ETFs are a collection of Master Limited Partnerships.  Alerian EFT is taxed like a c-corporation. The more you made the higher the taxes.  The fund is $7.4 billion; it is the largest ETF of MLPs.  It has a yield of 12%.  The North American Energy Infrastructure Fund is $1 billion!  This fund has more than just MLPs in it.  Royalty trusts and c-corporations are part of it too.  Its yield is 5%.  There are many other MLP ETFs, but this will suffice.

History of MLPs
MLPs was started in 1981 by the Apache Corporation.  The Apache Corporation created an MLP so investors of limited capital can make money.  Apache Corporation was successful with its MLP, so other companies created their own MLPs.  The first MLP mutual fund was created in 2010.  It was created to protect income from inflation.  There are over 100 MLPs in the US!

Conclusion
An MLP is like stock, but the investor becomes a partner.  They have tax benefits.  There 3 primary types of MLPs.  They involve some risk and have their own ETFs.  They have been around for 3 decades.  I think it's a good idea for you to get some MLPs.   Due diligence is very important.    

References

https://www.oppenheimerfunds.com/investors/article/what-is-an-mlp
www.mlpassociation.org
http://www.investopedia.com/
http://www.dividendyieldhunter.com/master-limited-partnerships-yield/
http://www.investinganswers.com/financial-dictionary/commodities-precious-metals/master-limited-partnership-mlp-803
http://www.forbes.com/sites/advisor/2014/09/30/what-you-need-to-know-about-mlps-and-investing-in-energy/#3d43638dc4ee
http://www.simplysafedividends.com/master-limited-partnerships-risks/
http://www.investopedia.com/articles/investing/040916/5-largest-mlp-etfs-and-etns-amlp-amj.asp
What is an MLP?
MLP Portfolio 
MLP Taxes
Risks and Rewards of MLPs
Distribution
MLP ETFs