From the May 2011 issue of Research Magazine • Subscribe!

Morgan Launches MLP ETN

Morgan Stanley has launched a new exchange-traded note linked to master limited partnerships (MLPs). The Morgan Stanley Cushing MLP High Income Index ETN (MLPY) tracks an index containing 30 MLPs that hold energy infrastructure and related shipping assets in North America.

Over the past five years, the Cushing MLP High Income Index has produced a return of 18.78 percent.

MLPY distributes quarterly coupon payments, less accrued tracking fees. The ETN is a senior, unsecured debt obligation of Morgan Stanley.

Holding MLPs inside an ETN vehicle subjects investors to credit risk but simplifies tax reporting. ETN investors receive a 1099 tax return instead of a K-1 form for income tax reporting.

MLPY’s annual fee is 0.85 percent and its maturity date is March 21, 2031.

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