Master limited partnership (MLP) is a limited partnership that is publicly traded on a securities exchange. It combines the tax benefits of a limited partnership with the liquidity of publicly traded securities.
MLPs are limited by United States Code to only apply to enterprises that engage in certain businesses, mostly pertaining to the use of natural resources, such as petroleum and natural gas extraction and transportation. To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service (IRS) deems "qualifying" sources. For many MLPs, these include all manner of activities related to the production, processing or transportation of oil, natural gas and coal.[1]
Some real estate enterprises qualify for a similar tax treatment as a real estate investment trust. Other publicly traded partnerships, such as Blackstone Group or Cedar Fair, do not qualify for pass-thru tax status and must pay federal corporate income taxes.
In practice, MLPs pay their investors through quarterly required distributions, the amount of which is stated in the contract between the limited partners (the investors) and the general partner (the managers or GP). Typically, the higher the quarterly distributions paid to limited partners, the higher the management fee paid to the general partner. This provides the general partner with an incentive to maximize distributions through pursuing income-accretive acquisitions and organic growth projects.[citation needed] Failure to pay the quarterly required distributions may constitute an event of default.[citation needed]
Because MLPs are classified as partnerships, they avoid corporate income tax at both a state and federal levels. Additionally, limited partners may also record a pro-rated share of the MLP's depreciation on their own tax forms to reduce liability.[citation needed] This is the primary benefit of MLPs and gives MLPs relatively cheap funding}}
The tax implications of MLPs for individual investors are complex. While distributions from MLPs are taxed at the marginal rate of the limited partner, there may be no tax advantage to claiming the pro-rated share of the MLP's depreciation when the investments is held in a tax deferred account.[citation needed] To encourage tax-deferred investors, many MLPs set up corporation holding companies of limited partner claims which can issue common equity.Template:Http://www.cnbc.com/id/49438008
A general partner in an MLP often begins with a small stake of about 2% in the partnership, but is given incentive distributions from net income after the quarterly required distributions.[citation needed] Since these distributions are usually paid in the form of increased equity claims the general partner may attain an increased share of the partnership's ownership.[citation needed]
In May 2010, the first ever MLP mutual fund was launched, with a stated goal of providing "a high level of inflation-protected income currently through a 7.8 percent distribution yield, which is higher than equity alternatives such as REITs and Utilities." The fund is a part of the SteelPath Mutual Fund Family.[2]
On August 25, 2010, the first MLP exchange traded fund (ETF) was launched by Alerian, the company that manages the benchmark MLP index (NYSE: ^AMZ). This fund was similarly designed to the above mentioned mutual fund in that it avails a new level of diversification to investors and, according to Alerian President Kenny Feng, "provides a single Form 1099, no K-1s, and allows investors to potentially benefit from return of capital and qualified dividend tax treatment of distributions."[3] The fund is known as the Alerian MLP ETF (NYSE: AMLP).
Energy MLPs
Because of such stringent provisions on MLPs, and the nature of the QRD, the vast majority of MLPs are pipeline businesses, which earn very stable income from the transport of oil, gasoline or natural gas. Energy MLPs are defined as owning energy infrastructure in the U.S., including pipelines, natural gas, gasoline, oil, storage, terminals, and processing plants. They are integral to run the energy infrastructure to the U.S., therefore providing a very basic, stable business, which have consistently performed for investors.[citation needed]
Advantages of investing in energy infrastructure MLPs not only provide tax benefits flowing to investors but also low commodity exposure.[citation needed]
See also
- Kommanditgesellschaft auf Aktien (KGaA), a similar business entity under German law.
Kommanditgesellschaft auf Aktien
For the radio station formerly known as KGAA, s
Kommanditgesellschaft auf Aktien – abbreviated KGaA – is a German corporate designation standing for 'partnership limited by shares', a form of corporate organization roughly equivalent to a master limited partnership. A Kommanditgesellschaft auf Aktien has two types of participators. It has at least one partner with unlimited liability (Komplementär). It is in that sense a private company. Komplementärs are natural persons or legal persons. If the Komplementär is a corporation with limited liability then the type of the company has to be named as GmbH & Co. KGaA, Limited & Co. KGaA or AG & Co. KGaA.[1]
The investment of the partners with limited liability (Kommanditisten) is the stock of the company (Grundkapital) and divided into shares. A KGaA is in that aspect comparable with a German Aktiengesellschaft.
The investment of all partners is the corporate's total capital (Gesamtkapital). The KGaA is a traditional type of very large family business (that are partly publicly traded) in Germany.[2]
[edit] Examples
- Henkel KGaA is a DAX listed household products company founded in 1876. Henkel's CEO and members of the Henkel family are partners with unlimited liability.
- Merck KGaA is a DAX listed chemical and pharmaceutical company founded in 1668. Partner with unlimited liability is the E. Merck OHG. Members of the Merck family and the CEO of the Merck KGaA are partners of the E. Merck OHG and therefore unlimited liable.
- Borussia Dortmund GmbH & Co. KGaA is the only German football business publicly traded on stock market. Partner with unlimited liability is the Borussia Dortmund Geschäftsführungs-GmbH which is owned by the Borussia Dortmund Football Club.
- Arcor AG & Co. KGaA is KGaA where the partner with unlimited liability is an Aktiengesellschaft.
- Hella (company)
- FALKE KGaA (company)
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FAMCO MLP & Energy Income Fund
About Us
The FAMCO MLP team is dedicated to managing Master Limited Partnerships (MLPs) and energy infrastructure strategies for open and closed-end mutual funds, public and corporate pension plans, endowments and foundations and private wealth individuals. FAMCO MLP’s core philosophy is that investment decisions should always be guided by a disciplined, risk-aware strategy that seeks to add value in all market environments. FAMCO MLP is a division of Advisory Research, Inc. (“ARI”), a wholly owned subsidiary of Piper Jaffray Companies (“PJC”). .
FAMCO’s MLP and Energy Infrastructure Experience
- Experienced, dedicated team
- Longest MLP track record* ‡
- MLP and Energy Infrastructure investor since 1995
- Five MLP market cycles
- Robust investment process
- Bottom-up, company specific cash flow models for every MLP in our coverage universe
- Thematic overlay
- Institutional scale with significant available capacity
- $ 2.8 billion* in MLP assets under management.
- Legacy of customized separate accounts to optimize client objectives
- Institutional firm with multiple asset class experience
- Competitive fees
*As of 6/30/12
‡FAMCO has the longest track record out of all MLP managers in the Parker Global Strategies MLP Manager Index (PMLPI). This index is composed of 44 underlying investment programs managed by a total of 16 constituent investment managers
Designed to provide the key investment characteristics of the Master Limited Partnership ("MLP") asset class
Energy infrastructure assets exhibit characteristics that are attractive to many investors because they typically exhibit the following characteristics
- Monopolistic, must-run assets
- High and stable level of cash flows
- Limited correlation to the U.S. economy
Investors can access energy infrastructure via MLPs, as well as the equity and debt of the MLP affiliates
FAMCO MLP & Energy Income Fund seeks to offer investors the following benefits
- 1099 – No K-1s, no state tax filings
- No Unrelated Business Taxable Income ("UBTI")
- High level of current income
- Increased opportunity set by investing across the capital structure
- Increased liquidity
- Lower volatility
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Current Performance
1Public Offering Price
2Inception date: Class A: 05/18/2011; Class C 4/1/2012; Class I: 12/27/2010
*Class A and C Shares for FAMCO MLP & Energy Income Fund were first offered 5/18/2011 and 4/1/2012 respectively. The returns prior to this date are those of Class I shares that have been recalculated to apply the estimated fees and expenses, net of any fee and expense waivers, of the Class I Shares as disclosed in the most recent prospectus. Class I Shares of the FAMCO MLP & Energy Income Fund commenced operations on 12/27/2010.
The performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end, please call 1-888-805-0005.
A redemption fee of 2.00% will be imposed on redemptions or exchanges of shares you have owned for 90 days or less.
Distribution Yield as of 12/31/2011
Class A: 5.33%
Class C: N/A
Class I: 5.40%
30-day SEC Yield as of 12/31/2011
Class A: 2.22%
Class C: N/A
Class I: 2.66%
The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships that provides investors with an unbiased, comprehensive benchmark for this emerging asset class. The index, which is calculated using a float-adjusted, capitalization-weighted methodology, is disseminated real-time on a price return basis (NYSE: AMZ).
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About the Fund
Investment Objective
The Fund’s primary investment objective is current income and secondary investment objective is long-term capital appreciation. There can be no assurance that the Fund will achieve its investment objective. The Fund’s investment objective may be changed without shareholder approval.
Investment Process
Our firm-wide approach to investment decisions can be broadly characterized as a top-down analysis of market and economic conditions. This is the first step in our investment process. The MLP investment team’s views on various MLP industries and thematic opportunities provide us a foundation upon which we start our bottom-up process. The second step of our intensive process is a fundamental analysis of the energy industry that informs our team’s differentiated views based upon information collected from publicly available data sources and management and industry contacts. FAMCO integrates its fundamental analysis, modeling, risk management, and valuation process with a systematic qualitative assessment of each MLP and thematic overlays to construct portfolios for our client mandates.
Investment Strategy
MLP & Energy Income Fund
Under normal market conditions, the fund will invest at least 80% of its total assets in publicly traded equity and debt securities of MLPs, and in publicly traded equity and debt securities of other companies, focused in the energy infrastructure sector.
The fund will purchase securities across the capital structure of MLPs and their affiliates, including MLP and affiliate equity and debt securities; with the goal of providing greater liquidity, and lower volatility with a high correlation to MLP returns. The fund seeks to invest in companies with:
- High yields relative to other yield focused alternative.
- Same underlying investment thesis as MLP equity strategy, but with a more senior average position in the capital structure
- May produce high portfolio income with lower volatility
- Alpha opportunity through asset allocation among MLPs, energy infrastructure equities, investment grade and high yield bonds.
Principal Risks of Investing
Market Risk. Market risk is the risk that the Fund’s share price may be affected by a sudden decline in the market value of an investment, or by an overall decline in the stock market.
Sector Concentration Risk. The Fund’s investments will be concentrated in the energy infrastructure sector. The focus of the Fund’s portfolio on a specific sector may present more risks than if the portfolio were broadly diversified over numerous sectors.
MLP Units Risk. An investment in MLP units involves some risks which differ from an investment in the common stock of a corporation. Holders of MLP units generally have limited control and voting rights on matters affecting the partnership. The value of the Fund’s investment in MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If an MLP does not meet current legal requirements to maintain partnership status, or if it is unable to do so because of tax law changes, it would be taxed as a corporation and there could be a material decrease in the value of its securities.
General MLP Risk. MLPs historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, MLPs may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, a significant portion of the market value of an MLP may be based upon its current yield. Accordingly, the prices of MLP units may be sensitive to fluctuations in interest rates and may decline when interest rates rise.
Energy and Natural Resource Company Risk. Under normal circumstances, the Fund concentrates its investments in the energy infrastructure sector and may invest a significant portion of its assets in the natural resources sector of the economy, which includes a number of risks, including the following: supply and demand risk, depletion and exploration risk, marine transportation companies risk, regulatory risk, commodity pricing risk, weather risk, cash flow risk, affiliated party risk, catastrophe risk, acquisition risk, and natural resources sector risk.
Credit Risk. This is the risk that the issuer or guarantor of a fixed income security will be unable or unwilling to make timely payments of interest or principal.
Interest Rate Risk. Generally, fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, with lower rated securities more volatile than higher rated securities.
High Yield Securities Risk. High yield securities, also known as “junk bonds”, are below investment grade quality and may be considered speculative with respect to the issuer’s continuing ability to make principal and interest payments. Lower-rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher-rated securities.
Derivatives Risk. There are various risks associated with transactions in derivative instruments. A decision as to whether, when and how to use involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events.
Leveraging Risk. Certain transactions, including the use of derivatives, may give rise to a form of leverage. To mitigate leveraging risk, the Fund’s custodian will segregate or identify liquid assets or otherwise cover the transactions that may give rise to such risk.
Tax Risk. The Fund intends to elect to be treated, and to qualify each year, as a “regulated investment company” under the U.S. Internal Revenue Code of 1986 (the “Code”). To maintain qualification for federal income tax purposes as a regulated investment company under the Code, the Fund must meet certain source-of-income, asset diversification and annual distribution requirements, as discussed in detail below under “Federal Income Tax Consequences”
Depreciation or other cost recovery deductions passed through to the Fund from investments in MLPs in a given year will generally reduce the Fund’s taxable income, but those deductions may be recaptured in the Fund’s income in one or more subsequent years. When recognized and distributed, recapture income will generally be taxable to shareholders at the time of the distribution at ordinary income tax rates, even though those shareholders might not have held shares in the Fund at the time the deductions were taken by the Fund, and even though those shareholders will not have corresponding economic gain on their shares at the time of the recapture. In order to distribute recapture income or to fund redemption requests, the Fund may need to liquidate investments, which may lead to additional recapture income.
Non-Diversification Risk. The Fund is non-diversified, which means that the Fund may invest in the securities of relatively few issuers. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
Advisor Risk. The skill of the Fund’s advisor plays a significant role in the Fund’s ability to achieve its investment objective. The Fund’s ability to achieve its investment objective depends on the advisor’s ability to select securities.
FAMCO MLP & Energy Income Fund
Class A Shares: INFRX, Class C Shares: INFFX, Class I Shares: INFIX
As of September 30, 2012
Investment Objective: FAMCO’s MLP & Energy Income Fund seeks to provide current income and long-term capital appreciation.
Investment Strategy: Under normal market conditions, the strategy will invest at least 80% of its total assets in publicly traded equity and debt securities of master
limited partnerships (“MLPs”), and in publicly traded equity and debt securities of other companies, focused in the energy infrastructure sector.
• Experienced and dedicated MLP team
• Longest MLP track record**
• $2.9 billion in MLP and Energy Infrastructure assets under management
* The Advisor has contractually agreed to waive its fees and/or pay for expenses of the Fund until April 1, 2013, and may be terminated by the Trust’s Board of Trustees. The Advisor is permitted to seek
reimbursement from the Fund, for three years from the date of any such waiver or payment to the extent a class’s total annual fund operating expenses do not exceed the limits described above.
** FAMCO MLP has the longest track record out of all MLP managers in the Parker Global Strategies MLP
Manager Index (PMLPI). This index is composed of 44 underlying investment programs managed by a total of
16 constituent investment managers.
FAMCO MLP seeks to provide investors in the Fund with the following benefits:
• 1099 – No K-1s, no state tax filings
• No Unrelated Business Taxable Income (“UBTI”)
• High level of current income
• Increased opportunity set by investing across the capital structure
• Increased liquidity
• Lower volatility
The performance data quoted here represents past performance. Past
performance is no guarantee of future results. Investment return and principal
value will fluctuate, so that an investor’s shares, when redeemed, may be worth
more or less than their original cost. Current performance may be lower or higher
than the performance information quoted. To obtain performance information
current to the most recent month-end, please call 1-888-805-0005.
A redemption fee of 2.00% will be imposed on redemptions or exchanges of
shares you have owned for 90 days or less.
Performance results with load reflect the deduction for Class A Shares of the
5.75% maximum front end sales charge. Class C Shares are subject to a
contingent deffered sales charge of 1.00% when redeemed within 12 months
of purchase.
***Standard deviation is a measure of volatility, which shows how much variation
exists from the average return.
Class A Shares for FAMCO MLP & Energy Income Fund were first offered 5/18/2011. Class C Shares for FAMCO MLP & Energy Income Fund were first offered 4/1/2012. The returns prior to this date
are those of Class I shares that have been recalculated to apply the estimated fees and expenses, net of any fee and expense waivers, of the Class A and C Shares respectively as disclosed in the most
recent prospectus. Class I Shares of the FAMCO MLP & Energy Income Fund commenced operations on 12/27/2010. Alerian MLP Index since inception performance is calcuated beginning 12/27/2010.
Top Ten Fund Holdings % of Portfolio
Enbridge Energy Management, LLC 6.92%
Kinder Morgan, Inc. 6.80%
Energy Transfer Equity, L.P. 4.88%
QEP Resources, Inc. 3.40%
Targa Resources Corp. 3.29%
ONEOK, Inc. 3.25%
The Williams Cos., Inc. 3.22%
Rockies Express Pipeline LLC 3.03%
TransCanada Corp. 3.02%
EQT Corp. 2.90%
Total 40.72%
Portfolio holdings will change due to ongoing management of the Fund.
References to specific securities should not be construed as recommendations
by the Fund, the Adviser or the Distributor.
FAMCO MLP’s Strengths:
General Information
Share Class A Shares C Shares I Shares
Ticker INFRX INFFX INFIX
NAV Per Share $11.46 $11.44 $11.31
Distribution Yield 5.38% 5.06% 5.66%
30-Day SEC Yield 2.22% N/A 2.66%
Gross Expense 2.77% 2.48% 3.30%
Expense Ratio (net)* 1.51% 2.26% 1.26%
Total Net Assets $193 Million
PERFORMANCE METRICS
(as of 9/30/2012)
Total Return Standard
Deviation***
Month QTR YTD 1-Yr Since
Inception
Since
Inception
Class I Shares 2.08% 7.43% 6.24% 23.39% 13.18% 12.18%
Class A Shares 2.05% 7.47% 6.13% 23.15% 13.00% 12.17%
Class A Shares (w/Max Load) -3.54% 1.55% 0.33% 16.40% 9.43% N/A
Class C Shares 1.96% 7.19% 5.34% 22.23% 12.52% N/A
Alerian MLP Index 1.99% 8.89% 8.50% 26.22% 13.91% 16.24%
FAMCO MLP | 8235 Forsyth Boulevard, Suite 700, St. Louis, MO 63105 | (888) 615 5806 | www.famcomlpfunds.com
Portfolio Construction: The Fund will purchase securities across the capital
structure of MLPs and their affiliates, including MLP and affiliate equity and debt
securities, with the goal of producing greater liquidity and lower volatility.
INVESTING IN THE ENERGY INFRASTRUCTURE VALUE CHAIN
MLP Summary:
With a 16 year track record investing in MLPs, FAMCO MLP understands the
characteristics that make these investments attractive to many investors:
• High relative yield
Fund Characteristics:
Many investors have found these characteristics offered by a single asset
class interesting, especially in light of recent market instability and a low yield
environment. However, many investors have avoided MLPs due to concerns
about tax complexity, lower liquidity, and volatility. The Fund was designed with the
intent to provide the core characteristics that typically make MLPs attractive while
addressing investor concerns about the MLP asset class by:
• Delivering a 1099 instead of a K-1
• No UBTI
• No filing requirement in multiple jurisdictions
Source: Bloomberg, Barclays Live
Higher yield is a function of the greater risk that a high yield fund’s share price will decline. Index
performance is not indicative of the performance of the FAMCO MLP MLP and Energy Income
Fund. The FAMCO MLP MLP and Energy Income Fund was incepted on 12/27/10, and as a
result, has a more limited performance history than the indices quoted. It is not possible to invest
directly in an index.
• Historically stable and growing cash flows throughout a market cycle
• Diversification as demonstrated by low correlation to other asset classes
Asset Number of
Fund Asset Allocation Allocation Yield Holdings
MLPs & Affiliates 60.36% 4.77% 31
Other Energy Infrastructure Equity 4.09% 3.13% 5
Investment Grade Bonds 6.91% 4.61% 5
High Yield Bonds 26.75% 6.41% 20
Cash & Equivalents 1.89% 0.01% N/A
Total 100.00% 5.04% 61
Note: The definition of an MLP Affiliate is non-MLP energy infrastructure companies with direct
ownership interest in an MLP
Equity Portion Alerian
Equity Characteristics of Fund MLP Index
Portfolio Yield (%) 4.57 6.15
Weighted Average Market Cap ($ Bn) 19.7 14.9
Distribution Rate Growth – Last 12 Months (%) 10.30 7.33
Number of Securities 35 50
Fixed Income Barclays U.S.
Portion of Aggregate
Fixed Income Characteristics Fund Bond Index
Yield to Maturity (%) 6.08 1.61
Effective Duration (years) 5.6 4.9
Correlation Ratios INFIX Alerian MLP
Index
S&P 500
Index
Barclays U.S.
Aggregate
Bond Index
INFIX 1.00 0.91 0.82 (0.35)
Alerian MLP Index 1.00 0.66 (0.24)
S&P 500 Index 1.00 (0.54)
Barclays U.S. Aggregate
Bond Index 1.00
FAMCO MLP & Energy Income Fund
Class A Shares: INFRX, Class C Shares: INFFX, Class I Shares: INFIX
As of September 30, 2012
Source: Alerian Capital Management, S&P 500, FactSet, FAMCO
Time Period: 12/27/2010 to 9/30/2012
0
1
2
3
4
5
6
7
8
Barclays U.S. Aggregate
Bond Index
S&P 500 Index
Alerian MLP Index
Class C Shares
Class A Shares w/Max Load
Class A Shares
Class I Shares
5.66%
1.61%
6.15%
2.22%
5.38% 5.08% 5.06%
YIELD (as of 9/30/12)
PORTFOLIO MANAGEMENT TEAM:
ABOUT FAMCO:
FAMCO MLP is registered with the Securities and Exchange Commission as an investment adviser and is a division of Advisory Research, Inc., a wholly owned subsidiary
of Piper Jaffray Companies.
The FAMCO MLP team is dedicated to managing Master Limited Partnerships (MLPs) and energy infrastructure strategies for open and closed-ed mutual funds, public
and corporate pension plans, endowments and foundations and private wealth individuals. FAMCO MLP’s core philosophy is that investment decisions should always be
guided by a disciplined, risk-aware strategy that seeks to add value in all market enviornments. This philosophy has served the FAMCO MLP team well as it has navigated
through MLP investment cycles since 1995. In March 2012, the FAMCO MLP team and its business was transferred from Fiduciary Asset Management, Inc. to its
affiliated investment adviser, Advisory Research, Inc.
James Cunnane is FAMCO MLP’s Chief Investment Officer and a member of the FAMCO MLP management team. He has been managing MLPs since 1992 and has
been with the firm since 1996. Quinn Kiley is the lead portfolio manager for MLPs, and has been with the team since 2005.
James J. Cunnane, Jr., CFA
Managing Director
Chief Investment Officer
Yrs. Experience: 20
Firm Tenure: 16
Quinn T. Kiley
Managing Director
Senior Portfolio Manager
Yrs. Experience: 12
Firm Tenure: 7
Mr. Cunnane is the Managing Director and Chief Investment Officer of FAMCO
MLP. He oversees the firm’s MLP and energy infrastructure product lines and
chairs the Risk Management Committee. He joined the FAMCO MLP team
in 1996 and currently serves as a portfolio manager for three publicly traded
closed-end end mutual funds: the Fiduciary/Claymore MLP Opportunity
Fund, the MLP & Strategic Equity Fund, Inc., and the Nuveen Energy MLP
Total Return Fund. He also serves as a portfolio manager for the FAMCO
MLP & Energy Income Fund, an open-end mutual fund, as well as a privately
offered open-end mutual fund. Mr. Cunnane holds a B.S. in finance
from Indiana University and is a Chartered Financial Analyst (CFA) charterholder.
He serves on the finance council and investment committee of the
Archdiocese of St. Louis and on the Board of Directors of St. Patrick’s Center.
Mr. Kiley is a Managing Director and Senior Portfolio Manager of FAMCO MLP
and his responsibilities include portfolio management of various energy infrastructure
assets and oversight of the energy infrastructure research process.
He joined the FAMCO MLP team in 2005. Mr. Kiley serves as a portfolio manager
for three publicly traded closed-end mutual funds: the Fiduciary/Claymore
MLP Opportunity Fund, the MLP & Strategic Equity Fund, Inc. and the Nuveen
Energy MLP Total Return Fund. He also serves as a portfolio manager for the
FAMCO MLP & Energy Income Fund, an open-end mutual fund, as well as a
privately offered open-end mutual fund. Prior to joining the FAMCO MLP team,
Mr. Kiley served as Vice President of Corporate & Investment Banking at Banc
of America Securities in New York. He was responsible for executing strategic
advisory and financing transactions for clients in the Energy & Power sectors.
Mr. Kiley holds a B.S. with Honors in Geology from Washington & Lee University,
a M.S. in Geology from the University of Montana, a Juris Doctorate from Indiana
University School of Law, and a M.B.A. from the Kelley School of Business
at Indiana University. Mr. Kiley has been admitted to the New York State Bar.
FAMCO MLP & Energy Income Fund
Class A Shares: INFRX, Class C Shares: INFFX, Class I Shares: INFIX
As of September 30, 2012
© 2012 FAMCO MLP a division of Advisory Research, Inc. All Rights Reserved.
RISK FACTORS
You should consider the Fund’s investment objectives, risks,
charges and expenses carefully before investing. For a prospectus
or summay prospectus, that contains this and other information
about the Fund, call 1-888-805-0005. Please read the prospectus or
summary prospectus carefully before investing.
Liquidity Risk: Certain MLP securities may trade less frequently than those of larger
companies due to their smaller capitalizations. At times, limited trading volumes
may result in abrupt or erratic movements, or result in difficulty in buying or selling
significant amounts of such securities.
Industry Risk: Energy infrastructure companies are subject to risks specific to
the industry they serve including, but not limited to, fluctuations in commodity
prices, reduced volumes of natural gas or other energy commodities available for
transporting, processing, storing or distributing, changes in the economy or the
regulatory environment or extreme weather.
MLP Risk: Investments in securities of MLPs involve risks that differ from
investments in common stock including risks related to limited control and limited
rights to vote on matters affecting the MLP, risks related to potential conflicts of
interest between the MLP and the MLP’s general partner, cash flow risks, dilution
risks and risks related to the general partner’s limited call right.
Additionally, investing in MLPs involves material income tax risks and certain other
risks. Actual results, performance or events may be affected by, without limitation,
(1) general economic conditions, (2) performance of financial markets, (3) interest
rate levels, (4) changes in laws and regulations and (5) changes in the policies of
governments and/or regulatory authorities. MLPs may have additional expenses,
as some MLPs pay incentive distributions fees to their general partners.
Fixed Income Risk: Generally, fixed income securities decrease in value if the
interest rates rise and increase in value if interest rates fall, with lower rated
securities more volatile than higher rated securities. High yield securities are
below investment grade quality and may be considered speculative with respect
to the issuer’s continuing ability to make principal and interest payments. Lowerrated
securities may be more susceptible to real or perceived adverse economic
and competititive industry conditions than higher-rated securities. The issuer or
guarantor of a fixed income security may be unable or unwilling to make timely
payments of interest or principal.
There are various risks associated with transactions in derivative instruments. A
decision as to whether, when and how to use derivatives involves the exercise of
skill and judgment, and even a well-conceived transaction may be unsuccessful
to some degree because of market behavior or unexpected events. Certain
transactions, including the use of derivatives, may give rise to a form of leverage.
To mitigate leveraging risk, the Fund’s custodian will segregate or identify liquid
assets or otherwise cover the transactions that may give rise to such risk.
The value of MLPs depend largely on the MLPs being treated as partnerships
for U.S. federal income tax purposes. 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. The MLPs would
be subject to U.S. federal income taxation, and 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. In addition, there is the potential that
investors may be required to make tax filings in multiple jurisdictions related to
MLP investing in separate accounts.
The Alerian MLP Index is a composite of the 50 most prominent energy Master
Limited Partnerships that provides investors with an unbiased, comprehensive
benchmark for this emerging asset class. The index, which is calculated using
a float-adjusted, capitalization-weighted methodology, is disseminated real-time
on a price return basis (NYSE: AMZ). The S&P 500 Index is widely regarded
as a standard for measuring U.S. large capitalization stock market performance.
The Barclays Capital U.S. Aggregate Bond Index (formerly the Lehman Brothers
Aggregate Bond Index) measures U.S. dollar denominated, investment grade
bond markets.
Yield, performance, and fund flows information discussed in this commentary
are historical and relate to MLPs and the S&P 500 generally. Such yield and
performance information does not represent the performance of the FAMCO MLP
& Energy Income Fund. Past performance does not guarantee future results.
The Fund intends to elect to be treated, and to qualify each year, as a “regulated
investment company” under the U.S. Internal Revenue Code of 1986 (the
“Code”). To maintain qualification for federal income tax purposes as a regulated
investment company under the Code, the Fund must meet certain source-ofincome,
asset diversification and annual distribution requirements. If for any
taxable year the Fund fails to qualify for the special federal income tax treatment
afforded to regulated investment companies, all taxable income will be subject to
federal income tax and possibly state and local income tax at regular corporate
rates (without any deduction for distributions to shareholders) and any income
available for distribution will be reduced.
The FAMCO MLP & Energy Income Fund is distributed by Grand Distribution
Services, LLC, 803 W. Michigan Street, Milwaukee, WI 53233.
FAMCO MLP & Energy Income Fund
Class A Shares: INFRX, Class C Shares: INFFX, Class I Shares: INFIX
As of September 30, 2012
This Factsheet must be preceded or accompanied by the current prospectus.
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유튜브
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J.P. Morgan Exchange Traded Notes
J.P. Morgan is an award-winning global provider of innovative investment solutions. The firm offers a broad range of investment options, including Exchange Traded Notes (ETNs). ETNs are senior, unsecured debt securities issued by JPMorgan Chase & Co. that offer returns on investments based on exposure to different underlying assets. J.P.Morgan's ETNs can be utilized by a wide variety of investors to provide convenient access to markets or strategies that may not be easily or efficiently available via existing investment strategies.
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