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Not-So-Crude Markets: Energy Infrastructure and MLPs

A chart of oil prices in the past year looks a lot like a roller coaster. And the stock prices of oil companies tend to follow oil prices higher or lower. Today's episode will discuss an energy investment that’s different in many ways from the oil companies that are household names because of their corresponding gas stations—firms like Exxon Mobil and Chevron. We'll focus on energy infrastructure and MLPs, or master limited partnerships, and how they're used in some of our portfolios. Joining Host Drew Carter is joined by George Metrou, Portfolio Manager for the Dividend Select Equity strategy here in the US, and Dan McNeela, who is co-head of our target risk strategies in the U.S. Recording date: June 24, 2019

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Like all investments, MLPs have risks investors should consider before making an investment decision. Those risks include governance features that can favor management over other investors, potential conflicts of interest, and concentrated exposure to a single industry or commodity. Since most MLPs are clustered in the energy sector, they can therefore be sensitive to shifts in oil and gas prices. There may be advantages and disadvantages associated with MLPs including, but not limited to, MLPs’ net income being passed through to the investor, which is then taxed at the investor’s individual tax rate and certain distributions being deemed as return of capital. Morningstar and its affiliates, including Morningstar Investment Management do not provide tax advice. Individuals should consult with their Financial Adviser and/or tax professional about this and other tax issues relating to their accounts