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Yorkville Capital founder Darren Schuringa on master limited partnerships and why there are great opportunities in energy MLPs.
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We're looking for what could be a more stable strategy if you want to invest in commodities.
But there are assuring -- is your -- capital founder and portfolio manager he'll like energy and -- p.'s.
Darren joins me on the Fox Business -- exclusive master limited partnerships.
And you've been a big fan of these -- you might like them for energy watch.
Why because it's a great way to get exposure to commodity prices after point of the volatility that we just saw there on the charts.
Without having to be right short term on the direction of commodities for two reasons.
Long term hedges so generally their -- five years out so whatever happens -- commodity prices today doesn't affect your portfolio.
And number two long term contracts.
So you get exposure to commodities without having to be right short.
And implement target which is said there's a tax advantage -- master limited partnerships because.
They're not taxed at incorporated not Texas corporation's -- that's -- -- tax advantaged by going entities cracked a tremendous tax advantage at 80% of your distribution is tax deferred.
In -- finding it's almost virtually -- 100% of distributions -- return of capital now we have to say though that may was the worst month a long time for MLP's performance wise anyway.
Down 8% on -- -- basis a lot of that was concerned about China and Europe at this go click here all of that.
What do you say it to investors to say I'm Alex -- women it's been hit by 8%.
Patent but a great buying opportunity and that's so.
OK fair enough if you look at it six point 7% as the current yield 5% over treasuries right now at these levels and no -- -- generally be very well -- interest rates were near zero right now does that have a positive or negative effect on in your opinion here.
It has the -- are searching for yield against six point 7% him.
Three and half percent greater than when you get from reits right now 5% over treasuries.
Growth of distributions tax advantage they are just a wonderful invesco.
-- -- -- In the vis a little bit more because one of the things that you did -- launched -- -- fell.
-- -- LP we're showing that to our viewers on the screen it's ETF you want setback in -- -- -- new investment but at the same time.
-- we're looking at some of the companies in their Ferrellgas Partners one energy energy.
Smaller names may be off the radar just a little bit why these particular names of some your top holdings in this.
ET at absolutely because Katie and appease -- -- price given the spread over other investment alternatives.
Are -- fund yields almost 9% right now CP you know up.
50% more income.
From NOP exposure without thinking of any greater risk so it's such a -- -- segment of the asset class we like all know peace but for our first product offerings like commodities in the wake.
And was expenses like get to sit up point 82% as is as a low expense of the same time let's talk about -- is.
This bear market that we're seeing in in the commodity space -- means that it illustrious and huge catalyst overseas.
Isn't that oil prices are really gonna move for the rest of the summer I mean do you kind of change your strategy based -- I know we're talking short term but three months.
Four months what about that five year hedging.
Sandra back to that did not know pouring in and it's really interest -- I watch it every day yet they get a lot of our viewers to this pops up.
So it gave it again to add to your earlier point is this a great way to gain exposure to commodities.
Without having to be sitting on the did you receive every day worried about what's going on -- Spot okay it says nothing I was looking and I thought was interesting is some of the things that you like within the space in these are things that we talk about all the time in the business -- Nat gas fertilizer I thought that was interesting -- -- timber.
Marine propane -- mean so these are kind of extra added pieces of the commodities basically we don't think about.
Corrected its well diversified portfolio there's eleven different industry sectors and you just mentioned a lot of the.
The average two groups within the commodity space and MO peace and it's -- I mean there's there's an act rate now that's out there.
That will look to put alternative energy sources into the MLP structure.
It's an interesting way to play commodities for those of us -- don't wanna end up with a barrel of oil on her front doorstep if we play that contract from.
Absolutely I think it indicate to wait yeah exactly all right -- Syria -- Europe but capital -- you very much for for coming on the show interest anyway my.
