We believe that innovations in energy extraction may continue to support the United States as a leader in energy production and creation of investment opportunities.
Hydraulic fracturing "fracking,” horizontal directional drilling and seismic imaging of shale rock provide access to new supplies of oil and natural gas.
Productive shale and basin sites are helping the US become more energy independent.
Source: GSAM. For illustrative purposes only
A Master Limited Partnership (MLP) is a publicly traded partnership that is predominantly involved in energy infrastructure, and as a result, exposed to the growing production of US energy sources. Generally, an investor may purchase MLPs on established US security exchanges, like publicly traded stock.
The first MLP was launched in 1981 and aimed to attract smaller investors who typically could not allocate capital to partnership investments.
Over the past decade, MLPs have gained considerable interest from energy-related companies and investors due to a renaissance in US energy production and the differentiated investment characteristics of MLPs.
Today, retail investors can gain access to the MLP market through mutual funds that invest in MLPs and the energy sector.
Source: National Association of Publicly Traded Partnerships, June 30, 2014
Natural Gas and Non-oil Focused
Source: Bloomberg; GSAM. As of 06/30/16. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation.
There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Companies and industries (Midstream) that efficiently connect the producers (Upstream) to the consumers (Downstream) may be poised to profit.
The Goldman Sachs MLP Energy Infrastructure Fund offers pure-play MLP exposure at an attractive cost with a history of competitive performance.
MLPs may benefit from future US energy expansion as energy production is driving increased demand for energy infrastructure.
Despite recent volatility, US energy production is forecasted to increase over the long term.
The distributions provided by MLPs may be uncorrelated and differentiated from other sources of potential distributions.
MLPs have provided an attractive source of annual distributions (as of June 30, 2016).
Distributions paid by MLPs have historically been stable through various economic conditions and may provide less interest rate sensitivity than fixed income as well as an effective hedge against inflation.
MLPs have historically experienced limited interest rate sensitivity (June 1, 2006–June 30, 2016).