“There isn’t one risk that drives the entire MLP market,” says Reid. “But if two or three of the risks kick in, we believe it could trigger a 5% to 10% correction. And there are a fair number of trigger events out there now.”

Reid thinks the 30 or so MLPs and energy infrastructure stocks in the portfolio are better prepared than others to keep those risks at bay. To be included in the portfolio, companies must have growing fee-based assets and strong management teams that are best prepared to sustain long-term growth and keep those high payouts coming.

Holdings fitting the bill include Williams Companies (WMB). Based in Tulsa, Okla., the company is one of the largest energy infrastructure providers in North America and has significant business assets tied to the Marcellus Shale. It owns the general partner for two MLPs, Williams Partners and a recently acquired stake in Access Midstream Partners. Another top holding, Targa Resources Corp., (TRGP) is expanding its oil and gas pipelines across multiple shale and natural resource zones and is affiliated with an underlying MLP, Targa Resources Partners. And Plains All American Pipeline (PAA), an MLP that specializes in crude oil and natural gas storage and delivery, has increased its quarterly distribution by 187% since its initial public offering in 1998. The fund also invests in the general partner, Plains GP Holdings (PAGP). 

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