State Street Global Advisors launches MLP strategy for institutional investors
State Street Global Advisors has launched the passive SSgA S&P MLP Index Strategy, which offers exposure to master limited partnerships (MLPs) and other related securities of companies in selected sectors.
Aimed at institutional investors, the strategy covers the energy infrastructure sector, including firms typically engaged in the transportation, storage, refining, marketing, exploration, production and processing of minerals and natural resources.
It is managed using a replication methodology to proportionally invest in the securities comprising the S&P MLP Index, and is currently implemented as separately managed accounts.
These securities include both MLPs and publicly traded limited liability companies (LLCs), characterized by favorable tax structures and steady distribution payments.
The total annualized returns and distribution rate of the S&P MLP Index as of June 30, 2012 are 7.72% (1-year), 26.88% (3-year) and 9.62%(5-year) with a distribution rate of 5.99%.
Lynn Blake, senior managing director of SSgA and CIO of Global Equity Beta Solutions, said: “The current growth in the energy infrastructure industry offers opportunities to investors seeking to diversify their portfolio while generating stable revenue streams. Clients have access to an alternative asset class with high historical returns and distribution rates.”