State Street Global Advisors, the asset management business of State Street Corporation, has launched the SSgA S&P MLP Index Strategy.
This passive strategy offers institutional investors the opportunity to gain exposure to master limited partnerships (MLPs) and other related securities of companies in the energy infrastructure sector, including those typically engaged in the transportation, storage, refining, marketing, exploration, production, and processing of minerals and natural resources.
SSgA’s S&P MLP Index strategy 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), characterised by favourable tax structures and steady distribution payments.
The total annualized returns and distribution rate of the S&P MLP Index as of 30 June 2012 are 7.72 per cent (one-year), 26.88 per cent (three-year) and 9.62 per cent (five-year) with a distribution rate of 5.99 per cent.
“The current growth in the energy infrastructure industry offers opportunities to investors seeking to diversify their portfolio while generating stable revenue streams,” says Lynn Blake (pictured), senior managing director of SSgA and chief investment officer of Global Equity Beta Solutions. “With SSgA’s S&P MLP Index strategy, clients have access to an alternative asset class with high historical returns and distribution rates.”