MLPs - A “Bluelight Special”

 

While the market uptrend may very well continue for years to come, we believe it is prudent to look towards segments of the market which may offer superior upside potential when compared to downside risk. MLPs potentially offer a compelling case of such a risk/return opportunity.

2Q17 MLPs: Sentiment v. Fundamentals

Yorkville explores the battle between strong fundamentals and extremely negative sentiment surrounding the energy sector and provides our outlook for MLPs for the balance of 2017.

Yorkville MLP Indexes
(as of 9/15/2017)
ScoresPerformance
StabilityGrowthMTDYTD
MLP Segments/Styles
Universe9.01.7%0.5%-3.4%
Infrastructure9.26.7%0.4%-3.0%
Commodity8.5-5.5%1.4%-7.2%
Large Cap%
Growth%
MLP Sectors
Crude Oil Pipeline8.22.9%0.3%-18.6%
Downstream8.9-6.4%1.7%-3.0%
Energy Services6.0-19.7%3.7%-29.7%
Exploration & ProductionN/AN/A%1.5%-5.3%
Gathering & Processing9.24.9%0.0%4.8%
General Partners10.019.2%1.1%-1.7%
Marine Transportation8.9-8.1%0.6%3.4%
Natural Gas Pipelines9.13.9%-0.2%-1.7%
Natural Resources8.90.2%0.7%-14.3%
Refined Product Pipeline10.010.3%1.9%-2.6%
MLP Growth Opportunities Strategy - Performance
 
    Annualized  
Name 1
Year
3
Year
5
Year
Since
Inception+
Yorkville MLP Growth Opportunities Strategy (Gross)(1) 6.7%-13.2%7.7%11.1%
Yorkville MLP Growth Opportunities Strategy (Net) (2)4.5%-13.9%5.6%8.9%
Alerian MLP (3)0.4%-11.2%1.8%10.4%
S&P 500 (4)17.9%9.6%14.6%7.1%

+ Since Inception: January 1, 2002

Past Performance is not indicative of future returns.

MLP High Income and Energy Infrastructure Strategies - Performance
 
Name QTD YTD 1 Year Since
Inception+
Yorkville MLP High Income Strategy (Gross) (1) -5.2%-1.2%25.6%15.7%
Yorkville MLP High Income Strategy (Net) (2) -5.4%-1.9%21.6%12.6%
Yorkville Energy Infrastructure Strategy (Gross) (1) -10.9%-8.8%10.3%1.2%
Yorkville Energy Infrastructure Strategy (Net) (2) -11.3%-9.5%7.3%-1.7%
Alerian MLP (3) -6.4%-2.7%0.4%16.7%
S&P 500 (4) 3.1%9.3%17.9%6.7%

+ Since Inception: October 1, 2015

Past Performance is not indicative of future returns.

Yorkville Capital Management LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS® standards. Yorkville Capital Management LLC, is a Registered Investment Advisor with the Securities and Exchange Commission and is built to meet the growth in demand for income-generating investment strategies. The portfolio management team has been researching and investing in MLPs approximately since the inception of the asset class. This has led to a deep understanding of the MLP asset class and the factors driving its growth. The firm’s unique combination of research and investment experience informs the practices employed across all Yorkville MLP investment solutions including: rules based indexes, separately managed accounts and fund solutions.

The Yorkville MLP Growth Opportunities Strategy Composite contains fully discretionary equity accounts. The accounts are invested in the Yorkville MLP Growth Opportunities Strategy. The Yorkville MLP High Income Strategy Composite contains fully discretionary equity accounts. The accounts are invested in the Yorkville MLP High Income Strategy. The Yorkville Energy Infrastructure Strategy Composite contains fully discretionary equity accounts. The accounts are invested in the Yorkville Energy Infrastructure Strategy.

1  Gross-of-fee returns do not reflect the deduction of management fees and certain transaction costs which will reduce performance.

2  Net-of-fees returns for the MLP Growth Opportunities Strategy are calculated by deducting the highest fee of 1.50% from the monthly gross composite return. The fee schedule is as follows: 1.50% management fee and 10% performance fee above 10% hurdle with a high water mark. The management fee was increased from 1.0% and the high water mark added on January 1, 2017. Net of fee returns for the Yorkville MLP High Income Strategy are calculated by by deducting the highest fee of 1.50% from the monthly gross composite return. The fee schedule is as follows: 1.50% management fee and 10% performance fee above 10% hurdle with a high water mark. Net of fee returns for the Yorkville Energy Infrastructure Strategy are calculated by by deducting the highest fee of 1.50% from the monthly gross composite return. The fee schedule is as follows: 1.50% management fee and 10% performance fee above 10% hurdle with a high water mark.

3  Alerian MLP Index is the leading gauge of energy Master Limited Partnerships (MLPs). The float-adjusted, capitalization-weighted index, whose constituents represent approximately 85% of total float-adjusted market capitalization, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).

4  The S&P 500® Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks.

Standard Deviation measures the risk or volatility of an investment’s return over a particular time period; the greater the number, the greater the risk.

This information has been provided by Yorkville Capital Management, LLC. All materials presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments and should not be relied upon as the sole factor in an investment-making decision. The views and opinions expressed are those of the portfolio management team at the time of publication and are subject to change. There is no guarantee that these views will come to pass. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing. Past performance is not indicative of future returns.

For a GIPS® compliant presentation contact Yorkville Capital Management, LLC at (212) 755-1970 or info@yorkvillecapital.com.