Saturday, 16 December 2017

154. Individual performance: LMLP

Currently there’s only 10 pieces in my portfolio as a sort of wicked test case. 
One big question: is this worth a small expansion (worth about 900USD)?



After a short visit around the boards, my guess is that shares trade awfully expensive these days.. And I’ve become a bit hesitant to buying at tops this high.. Hence, NYSEARCA:LMLP, From the website: 

The ETRACS Monthly Pay 2xLeveraged Wells Fargo® MLP Ex-Energy ETN (NYSE: LMLP) (“LMLP” or the “ETN”) is an Exchange Traded Note linked to the monthly compounded 2x leveraged performance of Wells Fargo® Master Limited Partnership Ex-Energy Index, less investor fees. LMLP has been approved for listing on the NYSE Arca® exchange (subject to official notice of issuance) and pays a variable monthly coupon linked to the cash distributions, if any, on the Index constituents.

From the UBS ETRACS that are already being followed in my tracking sheet: the net dividends paid: 


Ever since the first dividends received from LMLP (1-10-2016) the 10 shares totalled up to about 18USD. Should this ETN perform at the same rate as last year the result next run should deliver a 144USD a year (when my order for 70 shares will be accepted later on today).

So far, it’s a monthly dividend all right. From the UBS website it’s registered a 12%+ dividend yield. Sweet deal here I guess.

Looking at the prospectus (and yes, occasionally I do that too :)) 42 pages of pure joy. In here, there’s a lot of covering risks and explaining when our initial investment is lost in its entirety.. Reminded me a little on the notary visit with my (back-in-the-day future) wife, the ride home was a silent one because of all the undesired events we had just listened to.. 

Back in 2014 trade begun at 25.00USD. Earlier this year, I purchased 10 off. And last Friday, at a 15.15USD another 70 would join my account if there are no further warnings to be found… 

Wait, there’s more: the weekherald of December 11th (2017) indicates a stunning 30% annualized dividend yield. Well, could someone run those figures again? That seems rather hard to believe. Also on the weeklyregister no real traces on why NOT to buy… 

Another valued source: Seekingalpha, with ETN specialist Stanford Chemist elaborating on the backgrounds of the ETRACS series. 

But, back to the prospectus: 

“However, if the Index Constituent Securities do not make any cash distributions, you will not receive a monthly coupon.”

So from there, the feeling arises as if dividends are very optional here. But I can not imagine this is the case for a UBS traded ETN. What is more: I just found that my order’s been accepted already, proud owner of 80 shares LMLP

If you have a minute, don’t hesitate to fill me in on your thoughts / opinions. Some good (and free) advice is always welcome. If you feel like connecting and sharing: please hit the Google+ follow button or find/follow me on twitter


Thanks for stopping by and have a great day! 




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