Morgan Stanley (MS) Launches MLP-Tied ETN

Morgan Stanley (NYSE:MS) announced it has launched a new exchange-traded note (ETN) linked to master limited partnerships (MLPs), trading under the name and ticker Cushing MLP High Income Index ETN (NYSEArca:MLPY).

The new ETN includes 30 MLPs that hold energy infrastructure and related shipping assets in North America.

"MLPs are partnerships that trade on public stock exchanges. Most MLPs own and operate assets in the energy sector as natural resource-based companies that own, build and maintain the energy infrastructure. They are structured as partnerships rather than taxable corporations, so they do not pay federal or state income taxes at the entity level. The business model of a typical MLP seeks the advantages of high barriers to entry, low price sensitivities and continued demand for energy-related products and services due to overall energy demand, said ETFguide.com.

"The MLPs inside MLPY are chosen for having the highest current indicative yields among an assortment of MLPs. The 'current indicative yield' of a security is defined as the last quarterly distribution annualized divided by the current security price, with adjustment in some cases made for more current information."

"Over the past five years, the Cushing MLP High Income Index has produced a return of 18.78% compared to a 2.37% for the Alerian MLP Index (NYSEArca:AMLP). The S&P 500 (NYSEArca:SPY) gained 2.37% over that same period.

Morgan Stanley closed Monday at $27.79, gaining $0.36, or 1.31 percent.