Since trickling into the market 2 years ago, the various MLP funds launched thus far have accumulated more than $2 billion.  But what exactly are MLPs?  Master Limited Partnerships (MLPs) are limited partnerships that are publicly traded on a U.S. securities exchange. Because of their structure as a partnership they must distribute the majority of their profits to shareholders, and also due to this structure are shielded from certain tax liabilities that most corporations are not. Most MLPs operate in the energy or "infrastructure" space, owning and operating natural gas and oil pipelines, or other such infrastructure interests.

One of the attractions to MLPs historically, aside from their distribution of earnings, is that their revenue is generally based upon fee-based revenues as opposed to the more volatile businesses of looking for Gas and Oil reserves, or drilling for them. MLPs are often seen as not owning the cars on the street, nor making the cars on the street, but instead owning the street and operating the toll booth for which vehicles must pass. In this sense revenues are a bit less volatile than other areas of the Energy segment, which may be greatly tied to changes in commodity prices, or the ability to find new supply.

Of course, a few years ago the desire to invest in MLPs was generally met only with the ability to buy individual issues. In April 2009 the first MLP ETN was launched, and there are now a handful of MLP Notes and one MLP ETF, which have been received with open arms by investors thus far. In this case the structure of an ETN or ETF adds a particularly attractive and uncommon element for investors by actually removing the need for a K-1.

Investors are generally forced to deal with the K-1 form when investing in an MLP, as a function of its structure being a limited partnership. However, neither MLP ETFs or ETNs generate a K-1 as the fund itself is not a partnership and does not hold futures contracts, and of course provides the diversification of multiple income streams through various MLPs held in the fund. Income is taxable as ordinary income, even if held in an IRA above a certain level, which is something to keep in mind. Overall, the funds offer an interestingly high yield opportunity and are worth considering today.

Here's a list of ETFs and ETNs for MLPs you can consider:

• MLPL:  UBS E-Tracs 2x Leveraged Long Alerian Infrastructure ETN
• MLPG:  UBS E-Tracs Alerian Natural Gas ETN
• MLPN:  Credit Suisse Cushing 30 MLP Index ETN
• AMJ:  JPMorgan Alerian MLP Index ETN
• MLPI:  UBS E-Tracs Alerian Infrastructure ETN
• AMLP:  Alerian MLP ETF

Below we have shown the return quilt for the above listed MLPs for the past 10 years along with that of the SPDR S&P 500 ETF Trust (SPY) to serve as a benchmark.  What we find is that the SPY is ranked last among the six MLPs in all but three of the years tested, which were 2005, 2008, and 2011 (thus far).  To get a quilt similar to the one below, go to the Performance Quilt tab located on the top of the AllETF page.