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General Finance Question – MLPs and Royalty Trusts

Q: I caught a clip of information Sunday morning about investing in the pipeline infrastructure for the gas/oil energy/utility sector. I was wondering where I could find or look into how to invest into this sector, are there any type of funds specifically or would this be individual company investments.

I’m looking to start trying to put some thought into income generating investments  and I have my 401K plan(via Fidelity) and was going to see if any of my current investments or others that Fidelity offers have more income generation potential.  I am 55 years old and have a few years till I retire.

 

A: We were talking about MLPs and royalty trusts.  MLPs can be found in a selection of mutual funds and ETFs.  Check out MLPI and AMJ for examples of ETFs that hold these types of investments.  Also, this is a good link for info on MLPs: http://www.alerian.com/education/mlp-education/education/mlp-education/

It may be difficult to find significant exposure of MLPs in your funds offered via your 401K at work, but when you retire (or with cash outside your 401K), you can begin investing in these types of asset classes.  If you are looking for “income” exposure in your 401K, you can certainly look for bond funds or “Growth and Income” investments that usually include dividend paying stocks in their mix.

As always, before you make any investment decisions, consider talking to a financial advisor that knows your situation in its entirety.

 


 

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